Up again: House price rises at 14-month high as Bank meets

The Bank of England’s monetary policy committee meets today for its monthly decision on whether the move base rate - and thus mortgage interest rates that are influenced by the BoE.

The meeting comes as new figures show that house prices rose in January at their fastest annual rate since November 2018, throwing more weight behind the ‘Boris Bounce’ concept of improved economic confidence since the political certainty provided by last month’s General Election.

The new figures, from the Nationwide, show annual house price growth now at 1.9 per cent, well up on December's 1.4 per cent, and higher than analysts’ expectations. 

"Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook" Nationwide's chief economist, Robert Gardner, says.

House prices last month alone rose 0.5 per cent.

Agents were understandably buoyed by the news.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “There has been more buyer and seller optimism around since even just before the election. But the real test for the market will come in February and March when we will see if that interest translates into higher transaction levels.

“Prices are likely to continue to be underpinned by a shortage of supply and relatively low levels of house building, while ongoing difficulties trying to raise deposits - evidenced by the struggles still facing first-time buyers - will keep demand in check.”

And Mark Harris, chief executive of mortgage broker SPF Private Clients, adds: “The resilience the housing market continues to show is encouraging, with yet another uptick … It is great to see first-time buyer numbers pick up - particularly in the 25 to 34 age bracket, no doubt supported by government schemes such as Help to Buy and lenders offering competitive rates at high loan-to-values. This is good for the overall strength of the market, although numbers are still well off the peak seen in 2004 so there are still signs that buyers are struggling with deposits and affordability.”

Today’s MPC meeting is the last to be chaired by outgoing Bank of England governor Mark Carney; many analysts say it’s too close to call as to whether members will vote for a rate cut.