House prices in the three months to January were 0.8% higher than in the same three months a year earlier, dropping from the 1.3% annual growth rate recorded in December, new data has revealed.
The Halifax House Price Index found that property prices in the latest quarter (November – January) were 0.6% lower than in the preceding three months (August – October).
However, the most significant decrease was in the monthly change, with house prices in January falling by 2.9% after rising by 2.5% in December. As a result of this fluctuation, the average house price in January was £223,691.
Commenting on the data, Halifax managing director Russell Galley said: “Attention will no doubt be drawn towards the monthly fall of -2.9% from December to January, the second time in three years that we have seen a drop as a new year starts.
"However, the bigger picture is actually that house prices have seen next to no movement over the last year, with annual growth of just 0.8%.”
Galley highlighted that this change could either be viewed as a “story of resilience”, as house prices have held up well in the face of significant economic uncertainty, or as a “continuation of the slow growth” that has been experienced over recent years.
“There’s no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have. However, more fundamentally it is key underlying factors of supply and demand that will ultimately shape the market,” he added.
“On the supply side the most constraining factor to the health of the market is the shortage of stock for sale, although this does support price levels. On the demand side we see very high employment levels, improving real wage growth, low inflation and low mortgage rates. All positive drivers tempered by the challenges of raising deposits.”
Galley said that Halifax is expecting price growth to “remain subdued” in the near term.
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