"Stability in the housing market is welcome at the moment with so much talk of rising and falling prices and seasonal changes."
Annual house price growth has now edged up to 4.5% from the 4.3% growth recorded in January.
The data also shows that more households in England continue to own outright than with a mortgage. Figures show that the share of cash transactions has increased significantly over the past decade from around 20% in 2005/06 to around 35% in 2008 and has remained fairly constant since then.
Robert Gardner, Nationwide's Chief Economist, says that cash buyers are a more important driver of housing market dynamics than they were a decade ago.
Gardner continued: “The sharp increase in the share of cash purchases in 2007 and 2008 was a function of mortgage transactions declining sharply, rather than the amount of cash transactions increasing. This reflects the impact of adverse labour market conditions and the tightening of credit conditions during the financial crisis, which limited the number of people able to buy with a mortgage, while fewer such constraints would have applied to cash purchasers.
“However, it is interesting that the share of cash transactions has not fallen back as the economy has recovered. Part of the reason is that mortgage market activity has increased only modestly and remains some way below the levels recorded in the mid-2000s.
“The low interest rate environment at home and abroad has also continued to support the flow of cash into other asset classes, including UK residential property."
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "Although there is not much change in Nationwide's figures, stability in the housing market is welcome at the moment with so much talk of rising and falling prices and seasonal changes. Most of our buyers and sellers are trying to get on with business in a 'steady as she goes' manner rather than worrying too much about the future.
"We have noticed an encouraging increase in first-time buyer demand for smaller properties, bearing in mind there seems to be a levelling of the playing field with investors and cash buyers who are more reluctant to take on new properties in view of imminent tax and other obligations."
Jonathan Harris, director of mortgage broker Anderson Harris, added: "February was a busy month for the mortgage market as we saw an uptick in new enquiries from buyers keen to get on with the business of moving. Article 50 will come whether we like it or not and buyers and sellers who need to move are mostly carrying on regardless, assuming they can find a property to move to.
"While the proportion of cash buyers may be higher than it was a decade ago, the vast majority of people still need a mortgage and are taking advantage of the fact that rates are so low. What’s more, lenders seem keen to lend and that competition should lead to the continuation of cheap rates through the spring."
