UK house prices rose again in February, defying higher mortgage rates and surging inflation. The Nationwide House Price Index climbed at an annual rate of 12.6% in February, up from a record January rise of 11.2%. The price of a typical UK home is now £29,162 more than a year ago — the largest year-on-year increase ever recorded by the lender.

Robert Gardner, Nationwide’s chief economist, says a combination of “robust demand and limited stock of homes on the market” had kept upward pressure on prices, despite inflation reaching a 30-year high and pushing borrowing costs upward. He adds: “The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation.”

Lucy Pendleton at independent estate agents James Pendleton, says of the data: “This just goes to show what’s possible when healthy demand meets the immovable obstacle of low stock levels. Buyers are still crossing swords to seal a deal and it’s getting ugly but recent world events have already rendered this startling read-out bang out of date.

“If inflation was the watchword before the Ukraine crisis, it is now this market’s North Star. Russia’s invasion has sent already hot commodity markets into meltdown, creating a tidal wave of effects that threaten to bind the economy to a steady succession of interest rate rises. This is likely to weigh on house price growth nationally in the coming months, particularly in those areas that have seen the biggest increases over the past year and a half, but it will also encourage prospective buyers to move their plans forward to beat higher borrowing costs.”

Nicky Stevenson, managing director at national estate agent group Fine & Country, comments: “Buyers will be taking a deep breath at this latest spike in house prices. Rocketing energy prices, volatile stock markets, and creeping interest rates have yet to make even the smallest dent on turbo-charged house price growth.