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UK annual house price growth dips in February, Nationwide says

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UK annual house price growth dips in February, Nationwide says

Annual house price growth in the U.K. dropped in February after an unexpected rise the previous month, the Nationwide Building Society said in its monthly report.

House prices grew at an annual rate of 2.2% in February, down from the 3.2% annual growth recorded in January.

On a seasonally adjusted basis, prices fell by 0.3% month over month in February compared to 0.8% growth in January. The average, unadjusted house price fell to £210,402 from £211,756 over the period.

Nationwide Chief Economist Robert Gardner said: "How the housing market performs in the year ahead will be determined in large part by developments in the wider economy and the path of interest rates. Brexit developments will remain a key factor, though these remain hard to foresee.

"We continue to expect the U.K. economy to grow at modest pace, with annual growth of 1% to 1.5% in 2018 and 2019. Subdued economic activity and the ongoing squeeze on household budgets is likely to exert a modest drag on housing market activity and house price growth."

He added: "Nevertheless, housing market activity is anticipated to slow only modestly, since unemployment and mortgage interest rates are expected to remain low by historic standards. Similarly, the lack of properties on the market is likely to provide ongoing support for house prices.

"Overall, we expect house prices to be broadly flat, with a marginal gain of around 1% over the course of 2018."