Nationwide says UK house prices up for the first time in a year
Year-on-year, the Nationwide says UK house prices rose for the first time since January 2023, up 1.2% against forecasts of a 0.7% rise. February alone saw a climb of 0.7%, again better than expected.
A slowdown in the housing market during 2023 has been one of the main talking points in the sector as mortgage rates climb to a generation high. The backdrop is that the Bank of England has been fighting runaway inflation with 14 consecutive rate rises, taking base lending to a 16-year peak of 5.25% by August. Has the corner been turned or are these numbers from the Nationwide all about a lack of supply?
(AI Video Summary)
The nationwide house price index
The recent release of the nationwide house price index has caused a lot of excitement in the world of house building and construction. The index revealed a surprising 0.7% increase in house prices in February, which was even higher than the expected 0.3% rise. On top of that, there was a 1.2% year-on-year increase in house prices across the UK, marking the first time there has been an increase in prices since January 2023. This exceeded the expected 0.2% rise.
The Bank of England
To understand why this is such a big deal, let's take a look at what has been happening in the housing market. Back in 2023, the housing market experienced a slowdown because the Bank of England raised interest rates multiple times to control rising inflation. By August, the interest rate had reached as high as 5.25%. Despite this, the house building and construction sector had been doing well, reaching its peak on January 10th. However, some people started to sell their stocks to take profits.
Taylor Wimpey and Barrick Developments
Now, with the release of the positive nationwide house price index, the house building sector has experienced significant gains. Major companies like Taylor Wimpey and Barrick Developments saw their stocks rise dramatically at the start of today's trading session. Although Taylor Wimpey's gains have slightly decreased, it is still up for a second consecutive day. Barrick Developments has also seen gains today. This positive movement can be seen in the entire sector, showing that the market is responding positively to the stronger-than-expected house price index.
Overall, the sentiment in the market remains optimistic, with the index currently up 0.2%. It's important to note that there may be some fluctuations, but the general outlook is positive.
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