"Looking ahead, economic developments will remain the key driver of housing market trends and house prices."
Prices rose 0.3% month-on-month, after taking account of seasonal factors.
Robert Gardner, Nationwide's chief economist, said: “While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low. The decisive election outcome may have provided a boost to buyer sentiment.
“Recent data releases indicate that the housing market has gathered momentum in recent months and the latest house price figures are in line with that trend. The number of residential property transactions and mortgages approved for house purchase increased around the turn of the year and surveyors have reported an increase in new buyer enquiries.
“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Business surveys suggest that activity recovered in the New Year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.
“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters. Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.
“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole."
Lucy Pendleton, property expert at independent estate agents James Pendleton, commented: “It’s been a robust February and the market has continued to stage a recovery having left past political dramas behind it. However, another peril now threatens this rise in activity.
“Until a week ago, this year still looked like it was going to be a turning point after a decade of weak sales but coronavirus has thrown all that into doubt.
“Not even a week has passed since the virus began to prompt the worst stock market sell-off since the financial crisis so it’s very difficult to tell what effect it will have on consumer confidence in the property market.
“It’s a key test of people’s resolve to finally transact, with the market having to contend with what is the third major threat to economic sentiment in as many months, after a general election in December and Brexit a month ago.
“Huge movements in the valuations of stock market indices will have only caught the tail end of the Nationwide data. If the frightening headlines continue into March, it’s inevitable that this crisis will have some effect on buyers’ attitudes as they watch the value of their other assets shrink. The extent of this will only become clear in a month’s time.”
