House prices saw their biggest January monthly increase since 2009, jumping by 2 per cent in the month, data from Halifax’s quarterly house price index showed, however an economist warns it is too early to draw wider conclusions due to January’s volatility.
This puts the average UK house price at £193,130.
Martin Ellis, the bank’s housing economist, said: “House prices in the three months to January were 1.9 per cent higher than in the preceding three months.
“This was the first increase in the quarterly rate of increase for six months. Annual price growth also picked up, to 8.5 per cent from 7.8 per cent in December, but remained significantly below last July’s peak of 10.2 per cent.”
He added that the bounce-back in house price growth coincides with reports of the first rise in mortgage approvals for six months in December.
The volume of mortgage approvals for house purchases increased by 2 per cent between November and December to 60,275, following five successive monthly falls.
“These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market.”
However, Mr Ellis warned that it was too early to draw any firm conclusions, as monthly figures in January can be “particularly volatile” due to the lower volumes of activity at this time of year.
Overall, Halifax expects a moderation in house price growth during 2015, with prices nationally predicted to increase in a range of 3-5 per cent in 2015 compared with 8 per cent in 2014.
Mr Ellis added that demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households’ spending power resulting from lower consumer price inflation and reduced fuel bills.
“Nonetheless, we expect the overall downward trend in house price growth seen since last summer to continue over the coming months.”
Alex Gosling, chief executive online estate agents HouseSimple, added: “After five straight months of falling numbers of mortgage approvals, lending is on the up again as more would-be buyers get off the fence.
“While the monthly rise in prices of 2 per cent should be taken with a pinch of salt as the number of sales in January is relatively low, the uptick in both the quarterly and annual rates of price growth suggests that buyer confidence is undimmed.
“While it’s a far cry from the frenzied double-digit growth seen in the first quarter of last year, a period of gentler growth is welcome.
“The property market is much less volatile than a year ago and feels more sustainable.
“It is a positive to see more balance in the market, rather than runaway prices purely across London and the south east.”
peter.walker@ft.com
