British house prices rebounded strongly last month, with Nationwide Building Society indicating a 3.5% annual increase surpassing the 2.9% gain forecast by economists after figures had dipped slightly in the preceding period. On a monthly basis, prices rose by 0.5%, thereby reversing the 0.6% fall seen earlier.
Market observers attribute last month's recovery to a combination of supportive economic factors. Unemployment remains low, while wages have been rising faster than inflation, bolstering household confidence.
Moreover, many prospective buyers are anticipating cuts to Bank of England interest rates, which in turn has underpinned renewed demand for property.
Despite the recent upswing, affordability remains stretched for many. First-time buyers, in particular, have been forced to extend mortgage terms-now averaging 31 years-to manage elevated monthly repayments.
Even as interest rates edge lower, repayments still consume around 23% of a new buyer's income, levels not seen since the period leading into the 2008 financial crisis.
Looking ahead, many analysts are cautiously upbeat. Nevertheless, persistent concerns over affordability may temper long-term growth, prompting some prospective purchasers to remain on the sidelines until lending conditions ease further.
