As a result, annual growth has increased to 4.5%, with the annual house price now standing at £205,846.
Robert Gardner, chief economist at the mutual, said that while the economy was performing “relatively strongly”, Nationwide expected it to slow throughout 2017.
“Nevertheless, in our view a small rise in house prices of around 2% 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,” he concluded.
Jonathan Harris, director of broker Anderson Harris, said that February had seen a jump in new enquiries, with buyers keen to get on with their move. He added: “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.”
Alex Gosling, chief executive of online estate agent HouseSimple.com, said the housing market needed a “confidence boosting spring”.
He said: “The first cut to mortgage tax relief is also just a couple of months away, and no-one really knows what impact that is going to have. The response to the second homes tax that came in last April was dramatic before and after the event, but we didn’t see investors completely desert the market as many people predicted. Investors quickly adapted to the changes and the same may well happen when the phasing out of mortgage tax relief on buy-to-lets begins.”
The role of the cash buyer
Nationwide’s index also cast light on the important role of the cash buyer in today’s market, which today accounts for around 35% of transactions.
Gardner said: “Demographics is playing a role in boosting the number of cash transactions. As the UK population ages, so the proportion of people who own their home outright has increased, and when these people transact – for example, moving home or downsizing – they are more likely to do so in cash. Indeed, the number of people in England who own their home outright overtook those who own with a mortgage in 2014.”
However the role of the broker remains crucial in helping those buyers who do need funding help. Harris added: “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.”