Annual house price growth increased to 3% to £219,583 in March, up from 2.3% the month prior, according to Nationwide’s latest Housing Price Index.
This marked the fastest pace of growth since January 2018, when annual growth was 3.2%.
The last six months have all seen month-on-month increases, and prices rose 0.8% in the month, after “taking account of seasonal factors”.
However, Nationwide said that it is important to note that the cut-off point for collated data was “slightly before” the end of the month, thus developments following the UK government’s lockdown have not been reflected in these figures.
The group now says that the market is “grinding to a halt” as the pandemic continues to unfold, with a lack of transactions making it “difficult” to gauge house price trends in the coming months.
Nonetheless, it said that the “raft of policies” adopted to support the economy, support peoples’ incomes and keep borrowing costs down should “set the stage for a strong rebound once the shock passes”.
Robert Gardner, Nationwide’s chief economist, said: “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum.
“Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.”
He added: “But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.
“Indeed, a lack of transactions will make gauging house price trends difficult in the coming months. The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.”