Average UK house prices stood at £363,249 in February, rising 0.8%, or £3,000 from the previous month, posting the largest price rise in in 17 months.
This monthly increase is the largest since September 2022, although prices are 2.9% lower than a year ago, according to data from e.surv Acadata House Price Index.
But the annual decline in February still represents a near 1% gain over the 3.8% annual fall in January, the study points out.
E.surv director Richard Sexton says: “The tight supply is playing a part in this bounce back, coupled with improved affordability as borrowing rates have fallen and average wages growth.
“Whether this persists remains to be seen but expectation at the Bank of England is that rate cuts will materialise in the second half of the year and this should feed into further reductions in borrowing costs.”
The report follows the Spring Budget, where Chancellor Jeremy Hunt did little to address supply concerns in the housing market.
Sexton adds: “Our data underlines why the Chancellor was probably reluctant to stoke the market any further in the recent Budget. Few in the property industry were calling for more short-term shots in the arm from the Treasury.
“However, the Budget was another missed opportunity to address some systemic long-term issues about helping people get on the housing ladder in the first place.
“As a result, the big issues of supply and affordability remain unaddressed and will likely become very live election issues.”