LONDON (Reuters) - British house prices in February rose in annual terms for the first time in more than a year, mortgage lender Nationwide Building Society said on Friday, the latest sign of a recovery in the housing market after a dip in mortgage costs.
House prices were 1.2% higher than in February 2023, the first annual increase since January last year, Nationwide said.
Prices rose by a monthly 0.7% between January and February this year, it said.
A Reuters poll of economists had pointed to a rise of 0.7% in annual terms and a month-on-month increase of 0.3%.
"The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market," Nationwide chief economist Robert Gardner said.
The lender's price gauge was now only 3% below an all-time peak touched in the summer of 2022, shortly before the market was hit by the Bank of England (BoE) raising interest rates and bond market turmoil under former Prime Minister Liz Truss.
Over the three months to the end of February, prices rose by 1.2%, their fastest since July 2022.
The BoE kept its key borrowing rate at 5.25% last month, its highest since 2008, but it said the time for a cut might be approaching as inflation heads for its 2% target. Mortgage rates have been declining in anticipation of the BoE's next move.
The BoE said on Thursday that mortgage approvals in January were their highest since October 2022.