House prices rise for second month

For saleHouse prices edged up for the second month in a row in February in a further sign that the market is picking up in 2013, Nationwide reported.

Prices saw a 0.2% month-on-month increase to reach £162,638 on average, following a 0.5% rise in January.
The building society said there have been "tentative signs of a pick-up" in recent months, following the launch of a Government scheme to help borrowers, which has prompted lenders to slash their mortgage rates.

On Thursday, the National Association of Estate Agents (NAEA) said the number of would-be home-buyers registering with agents has reached its highest level in more than five years. It also reported that sales to first-time buyers are showing a strong increase.

Despite the recent uplift in house prices, average prices are unchanged compared with a year ago, Nationwide said.

Robert Gardner, Nationwide's chief economist, said evidence that the jobs market is improving despite the tough economy is likely to bolster demand from potential buyers in the coming months amid the improved mortgage conditions.

He said: "There are reasons for cautious optimism that activity will gather momentum in the months ahead...

"However, progress is likely to be gradual, as stubbornly high inflation will continue to exert pressure on household budgets. Moreover, buyer confidence is likely to remain fragile until there are signs that the wider economic recovery is firmly entrenched."

The number of mortgages on the market has increased by around one third since the Government introduced its Funding for Lending scheme, which gives lenders access to cheap finance to help borrowers, last August.

There have been signs of lenders stepping up efforts to help people with lower deposits who have been struggling to get on the ladder. These include some fee-free deals being offered by lenders such as the Co-op Bank and a recently launched mortgage from Barclays which helps buyers with a 5% deposit get on the property ladder, provided their parents stump up some cash which is kept in a separate savings account.
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