Few assets have enjoyed a positive start to 2020 but it looks like fading Brexit uncertainty has allowed UK house prices to eek out some growth in February.

Data released this morning from the Halifax show prices rose by 2.8% in February, compared to the same month last year.

On a monthly basis, prices were up by 0.3%, with quarter-on-quarter figures rising by 2.9%. This means the average UK house price stood at £240,677 during the month. 

Prices have stagnated on the whole as the spectre of Brexit has hung over the housing market but activity from both buyers and sellers has increased since the UK’s departure from the EU.

Halifax managing director Russell Galley said: “The UK housing market has remained steady heading into early spring. Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators. The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.” 

February figures from Nationwide told a similar story, with reduced uncertainty providing a welcome bump in prices during the month. But, taking the shine off the positivity is the concern posed by new obstacles.

Galley added: “Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”

Travel restrictions could make investment in UK residential properties less attractive, or at least more difficult, for developers and buyers alike.

Where local markets are particularly reliant on the selling of large new-build developments, a prolonged period of virus-induced lockdown will certainly not help. This likely affects London and the South East mostly - two areas which have lagged the average UK price growth over the past few years due to Brexit. If a return to hesitation among buyers and sellers appears, February’s momentum could peter out. 

The coronavirus is affecting both supply and demand in a range of markets. For now, the supply shock is the smaller issue, with the demand side being hit harder. If large numbers of people become sick and unable to work, or businesses find themselves in an enforced shutdown, the supply side will become more prominent. 

It is this potential eventuality that prospective buyers will have in mind. If job security starts to thin the last thing people will want is to hand over a sizeable deposit and sign a new mortgage. And while fiscal policy can alleviate some negative effects of supply shocks like cash flow problems, these are business-level interventions. With rates as low as they are, further action will have limited effects on individual purse strings and sentiment.

UK buyers might just tread lightly as the full extent of the coronavirus is still to be measured. As always, remembering the long term is important, especially when it seems like the short-term is getting all the attention. Most assets might be depressed at the moment but, as investors, we have to take the rough with the smooth and, importantly, widening our frame of view to take in the long-term opportunities on offer.

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.