UK house prices rose by 0.7 percent month on month typically in February, according to Nationwide Building Society.
The annual rate of change returned to positive territory for first time since January 2023 – with house prices up by 1.2 percent year on year on average, following a 0.2 percent annual fall in January.
The average UK house price in February was £260,420.
Robert Gardner, Nationwide’s chief economist, said: “House prices are now around 3% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.”
Mr Gardner noted that the decline in borrowing costs around the turn of the year appears to have “prompted an uptick” in the housing market.
He added: “Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.”
The latest mortgage approval data from the Bank of England showed borrowing jumped by 7.2 percent month on month, reaching 55,227 in January, up from 51,506 in December.
Mr Gardner continued: “Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates. After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.
“Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.”
He added: “While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile.”
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