House prices climbed by 0.4% in February on a month-to-month basis, according to the latest Halifax House Price Index (HPI).

This was the fifth consecutive monthly increase registered by Halifax and the date also showed that house prices increased by 1.7% annually.

Commenting on the latest numbers Quilter mortgage expert Karen Noye said: “The latest figures from the Halifax House Price index reveal that the housing sector has continued its strong start to the year, as prices increased by 0.4% in February representing the fifth monthly rise in a row.

“With the average cost of a home increasing to £291,699, the market has so far managed to resist the downward pressure being applied on it by the unfavourable market conditions and is back to a rising trajectory after some small losses last year.

Noye argued that part of the reason behind this resilience was that lower mortgage rates have helped to draw buyers to market evidenced by a 2% increase in transactions up to 82,000 from 80,500 in December 2023.

“However, there has been some increases in mortgage rates in recent weeks as a result of swap rates being higher which could dampen this newfound demand. But even a small increase in demand coupled with the huge lack of housing supply in the UK means that prices naturally increase due to the laws of supply and demand. This continues to shut out first time buyers from the market”.

Ingenious managing director real estate Tom Brown echoed Noye’s sentiment. “The UK property sector continues to demonstrate its resilience and popularity in the face of high inflation and higher borrowing rates. Nationally, there remains a significant shortage of housing inventory across most locations and price points. Consequently, any slow-down in sales volumes from homeowners is likely to be offset by increased demand from renters and investors.

However, he said it was essential to note that the situation is not uniform throughout the country and across all price ranges.

“When analysing opportunities, it is key to understand the underlying subsectors and regional dynamics.

“Taking too broad a view of the market can be misleading. For instance, the institutional housing sector has experienced fewer disruptions compared to the residential sector due to its long-term investment horizon, rental growth and substantial capital inflows”.

Foxtons chief executive Guy Gittins was encouraged by the findings of the latest HPI. “UK homebuyers have welcomed the increased degree of market stability that has come following the decision to hold interest rates at 5.25% since September of last year and as homebuyers have returned to the market we’ve seen declining house prices start to reverse.

He added: “Today’s figures provide further evidence of these improving market conditions and while we’re yet to see a base rate reduction materialise in 2024, the outlook remains a positive one for the year ahead.”