Any figure under 50 indicates that prices are falling, and the lower the figure, the steeper the decline. Any figure over 50 indicates that prices are rising.
The reading of 48.4 is up from 47.6 in January, and marks the highest reading since June 2010, indicating that prices fell at the slowest pace over the last month than at any time since then.
Households in London reported that the value of their home had risen, while all other 10 regions reported falling prices.
Outlook for house prices
The future HPSI which measures what households think will happen to the value of their property over the next year, climbed again this month, to the highest level since June 2010, showing a new level of confidence that house prices would rise in 2013.
The overall index reading for the UK jumped to 57.3, up from 54.5 in January. On a smoother three-month average basis, the future HPSI in February was 55.0, up from 54.5 in January and the highest since August 2010.
While there are regional differences in the outlook for prices, respondents in all regions expect the value of their property to rise over the next 12 months, the first time this has happened in more than two and a half years.
Londoners (64.2) lead the way, but are closely followed by those in the South East (62.2) and, perhaps more surprisingly, Wales (60.5). This marks the first month that households in Wales have reported that they are expecting property values to rise since July last year.
Households in Scotland and the North East are also expecting prices to rise for the first time in three months.
The extent of the price rises expected however still shows a north-south divide, with households in the southern regions more optimistic about prices rises than those in the north.
There was also a large jump in optimism about house price rises among those who own a home with a mortgage. The reading for this group rose from 56.0 in January to 62.3 this month, the highest reading since June 2010.
Likewise those aged between 35 and 44 are also more upbeat about possible house price rises over the next 12 months than at any time since June 2010.
Grainne Gilmore, head of UK residential research at Knight Frank, said:
The optimism over house prices seen at the start of the year has strengthened sharply this month, with households now more upbeat about the outlook for house prices than at any time since June 2010.
Households in every region expect prices to rise, reflecting a real change in outlook across the country.
The data suggests that households have brushed off the rather gloomy economic news, and instead have been buoyed by positive signals emanating from the mortgage market in recent weeks, with lending rates falling sharply and lending to new buyers picking up.
Indeed the HPSI readings show that mortgage borrowers are among those who are most optimistic about house prices.
Likewise, the outlook of those aged between 35 and 44 has becoming much more positive, and it is these buyers, who will typically be buying their first or second property, who are set to benefit from the looser mortgage lending conditions.
There are hopes that the Bank of England’s Funding for Lending scheme will further boost lending this year, and signals from the new Bank of England Governor that the base rate may be kept on hold for a prolonged period will only help those trying to climb onto the property ladder.
Chris Williamson, chief economist at Markit, said:
"House price optimism has perked up to its highest level in over two and a half years in February, providing encouraging evidence that the property market has seen a strong start to the year.
"The improvement in sentiment about current and future house prices provides firm evidence that the Funding for Lending Scheme is already having a noticeable beneficial impact on the market, via the improved availability of mortgages and the simple fact that people perceive that the new initiative will drive a recovery of the housing market.
"With rising housing market sentiment adding to the news from the PMI surveys of a return to growth of business activity in January, the picture for the UK economy has brightened considerably since late last year.
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