It was the second consecutive month with strong annual growth as January witnessed a 1.9% uptick over the previous 12 months. 

However, compared to the previous month property prices only rose by 0.3% in February, slipping back from the 0.5% rise in January.

Economic uncertainty remains

Robert Gardner, Nationwide chief economist, said: “Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Business surveys suggest that activity recovered in the New Year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.  

“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters. Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.” 

Jonathan Samuels, CEO of Octane Capital, said it was important that sellers remained realistic on price, as there was still a “fair amount of uncertainty”. 

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“As much as sellers may feel like they are holding all the cards, in the current climate that’s certainly not the case,” he added. 

Coronavirus threat

Lucy Pendleton, managing director at James Pendleton, said coronavirus had thrown a market recovery into doubt.  

“Not even a week has passed since the virus began to prompt the worst stock market sell-off since the financial crisis so it’s very difficult to tell what effect it will have on consumer confidence in the property market,” she said. 

Marc von Grundherr, director of Benham and Reeves, added: “An extremely strong start to the year on the face of it but as the world continues to tackle the COVID-19 pandemic, there are murmurings it could impact house prices as well as health across the domestic market.”