Halifax has reported that house prices rose in February for the fifth consecutive month.

Average house prices rose by 0.4% in February, the lender said.

Property prices grew 1.7% on an annual basis, compared to 2.3% in January.

Kim Kinnaird, director of Halifax Mortgages, said: “UK house prices rose for the fifth consecutive month in February, up by +0.4% or £1,091 in cash terms, with the average house price now £291,699.

“On an annual basis, house prices were +1.7% higher than a year ago, slowing from +2.3% in January. However, these figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.

“In fact, the average price tag of a home is now only around £1,800 off the peak seen in June 2022. While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain. Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.

“Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Brokers are finding that activity levels continue to improve, as buyers and sellers expect the next move in interest rates to be downwards, which has made them more willing to get on with their moves.

“However, the flurry of mortgage rate reductions has slowed, with a number of lenders increasing their ‘best buy’ rates again. This is because five-year Swap rates, which underpin the pricing of fixed-rate mortgages, have edged upwards from around 3.25 per cent at the end of December to the 4 per cent mark. Although rates may feel more palatable for borrowers than they did several months ago, they will have to get used to paying more for their mortgages than many have become used to.

“Those borrowers who have been waiting in the hope that mortgages will edge down further may now be disappointed, at least in the short term. It is therefore wise to secure a rate when you see one that you like the look of, for peace of mind, and then when you come to take it out, if rates have fallen in the meantime, you can move onto a cheaper deal.”