According to this morning's figures, this is the highest annual rate of growth since 2014, with the average price going over a quarter of a million pounds for the first time to reach a new record of £250,341.
On a non-seasonally adjusted basis, average house prices in the UK were unchanged between January and February 2021, compared with a decrease of 0.6% during the same period a year earlier (January and February 2020).
On a regional level, average house prices increased over the year by 8.7% in England, 8.4% in Wales, 8.0% in Scotland, and 5.3% in Northern Ireland.
In England the February data shows, on average, house prices have risen by 0.2% since January 2021. The annual price rise of 8.7% takes the average property value to £268,291.
The regional data for England indicates that:
The North West experienced the greatest monthly price rise, up by 1.3%, the North East saw the lowest monthly price growth, with a fall of -1.6%, the North West experienced the greatest annual price rise, up by 11.9%, and London saw the lowest annual price growth, with a rise of 4.6%.
Anna Clare Harper, chief executive of asset manager SPI Capital, says: "Despite being two months old, UK HPI data is relevant because it shows a more complete picture than other house price indices. Annual house price growth rose by 8.6% in the year to February, with no monthly increase on January.
"However, the housing market is not one market. The annual trend was led by exceptional growth in the North West of 11.9%, with double-digit growth in the East Midlands and Yorkshire and the Humber. This reflects strong fundamentals in these regions.
"Looking to the future, perhaps the biggest fear among investors is that house prices are reaching a peak, egged on by the temporary Stamp Duty reduction. The truth is more subtle than this.
"Firstly, different types of property and different locations are experiencing different growth trends now. There are still many locations and types of building (for example, regional blocks of flats) which offer value to investors and potential homebuyers.
"Secondly, the reduced stamp duty has not been the only driver of house price growth over the last year. We also have cheap debt as a result of very low-interest rates, which give buyers a ‘discount’; the release of pent-up supply and demand and desire to improve surroundings among existing homeowners; and the ‘flight to safety’, since in times of uncertainty, people want to put their money in a stable asset with low volatility. These trends are likely to hold up throughout 2021."
Nigel Purves, CEO of Wayhome commented: “Aspiring homeowners suffer another setback today with house prices rising by 8.6% over the year to February 2021, up from 8.0% in January this year – the highest annual growth rate since October 2014.
“And with average house prices in England increasing to £268,000 feasible buying opportunities continue to be squeezed. Indeed, despite incentives such as the stamp duty holiday and 95% government-backed mortgages now kicking in, affordability is still a major concern.
“That said, we’re still seeing the dash for more space is a priority as a quarter of UK renters and homeowner’s property needs have changed due to Covid-19. Indeed, a lot of hopeful homeowners are after larger homes with more indoor and outdoor space as we shift towards hybrid working. With the end of lockdown in sight, now is the time for the housing industry to support innovative ways to get people into homes that are actually suitable for their needs.”
