Average house price jumps by more than £3,000 in February despite recession

The average price tag on a home jumped by more than £3,000 month-on-month in February, according to Rightmove.

The resilience in the housing market comes despite the recent confirmation of the UK slipping into recession in the last half of 2023.

Rightmove said the increase is in line with the seasonal rise it would expect in February.

In signs of growing market momentum, the average asking price is also up by 0.1% compared with a year earlier, following a period of annual falls in every month since August 2023.

The number of sales agreed in the first six weeks of this year is also 16% higher than in the same period last year, Rightmove said.

Tim Bannister, Rightmove’s director of property science pointed to the stability of mortgage rates in recent months after the surge at the start of 2023.

He said: "Momentum to move in 2024 is continuing to build, but prospective sellers mustn’t get carried away. Buyers now have more choice of property for sale and many are still very price-sensitive, with mortgage rates remaining elevated."

The growth in prices comes as the Office for National Statistics estimated that gross domestic product (GDP) fell by a worse-than-expected 0.3% between October and December, following a decline of 0.1% in the previous three months - putting the UK into recession.

While economists believe that the recession will be short-lived, the figures are still damning for Prime Minister Rishi Sunak, who has previously pledged economic growth as one of his five key priorities.

Estate agents also agreed with Rightmove's report suggesting the housing market was looking up.

Michelle Niziol, chief executive at IMS Property Group in Oxfordshire said: “It’s been a positive start to the year, particularly when compared to the slower pace of this time last year.

“There’s a sense of optimism, helped hugely by mortgage rates dropping in recent months, which now seem to have settled and remained stable, giving prospective buyers assurance and confidence."

Kate Eales, deputy head of residential at Strutt & Parker said: “Activity is trending upwards compared to this time last year, which is encouraging, but the market remains price sensitive."

Rightmove’s report was released as a rental index from property firm Hamptons said that average rents on newly-let properties across Britain rose by 8.3% annually in January to £1,324 per month.

Hamptons said it marked the slowest pace of growth for 13 months and the first time in six months that growth was in single digits.

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