Despite the backdrop of higher interest rates, house prices in the UK continued their upward trajectory in February, according to the latest report from Halifax.

The data revealed a 0.4% increase in house prices during the month, marking the fourth consecutive monthly rise. On an annual basis, property prices experienced a more moderate growth rate of 1.7%, compared to a 2.3% increase in the previous month.

The average cost of a home in the UK now stands at £1,000 higher than the previous month, with London maintaining its position with the highest average house price across all regions, reaching £536,000. Notably, London witnessed a 1.5% increase in prices, marking the first positive annual growth since January 2022, indicating a potential shift in the capital’s property market dynamics.

Kim Kinnard, director at Halifax Mortgages, highlighted the relatively stable start to 2024 reflected in the housing market trends. Despite the slight moderation in annual price growth, other indicators such as mortgage approvals suggest increased housing activity. Moreover, the average home price is only approximately £1,800 shy of the peak observed in June 2022, indicating resilience in property values.

However, Kinnard also acknowledged the challenges faced by prospective homebuyers, particularly in raising a deposit and affording a substantial mortgage, amidst persisting economic uncertainties. Despite the recent easing of inflation and growth in wages, the affordability gap remains a concern, especially for those entering the property market.