House prices rose 0.6 per cent in February, an increase from 0.2 per cent in January, according to the latest house price index from Nationwide.
The lender says the average house price is now £205,846, with year-on-year growth of 4.5 per cent.
Nationwide chief economist Robert Gardner says the lender thinks the UK economy will slow this year.
But he adds: “Nevertheless, in our view a small rise in house prices of around 2 per cent is more likely than a decline over the course of 2017, since low borrowing costs and the dearth of homes on the market will continue to support prices.”
Legal & General Mortgage Club director Jeremy Duncombe says: “February’s figures from Nationwide show house price inflation continues to be the defining feature of the market – great for homeowners who are happy to watch the value of their property increase, not so good for those who want to move or get on the ladder.
“The Housing White Paper was a good start but unless we address the bigger structural challenges facing the market on the supply side – namely, planning, building on the green belt and reducing or removing the burden of stamp duty, we can’t expect to see meaningful change in the way our housing market looks.”
Anderson Harris director Jonathan Harris says: “February was a busy month for the mortgage market as we saw an uptick in new enquiries from buyers keen to get on with the business of moving.
“Article 50 will come whether we like it or not and buyers and sellers who need to move are mostly carrying on regardless, assuming they can find a property to move to.
“While the proportion of cash buyers may be higher than it was a decade ago, the vast majority of people still need a mortgage and are taking advantage of the fact that rates are so low.
“What’s more, lenders seem keen to lend and that competition should lead to the continuation of cheap rates through the spring.”