The average house price in the UK reached a record high in January, jumping to £299,138, according to Halifax.

The lender’s latest house price index revealed that house prices increased by 3% year-on-year, which is a slight decrease from 3.4% in December.

Month-on-month, house prices increased by 0.7%, following a drop of 0.2% in December.

Head of mortgages at Halifax, Amanda Bryden, said: "Affordability is still a challenge for many would-be buyers, but the market's resilience is noteworthy. There’s strong demand for new mortgages and growth in lending. With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March.

"Despite geopolitical uncertainties, and waning consumer confidence, other key indicators look fairly positive for the housing market. The Bank of England has made its first base rate cut of the year, and there are probably more to come. Household earnings are expected to continue outpacing inflation – albeit that gap may narrow – easing some of the financial pressure still being felt from the cost-of-living squeeze."

Northern Ireland was again the strongest performing region in the UK, with house prices increasing by 5.9% year-on-year in January. Despite a drop in growth from an annual increase of 7.3% in December, house prices in the country now stand at an average of £205,473.

In Wales (£227,397) and Scotland (£210,690), house prices increased by 3.6% and 2.4% respectively.

However, the North East overtook the North West as the region in England with the strong annual property price growth, increasing by 5.2% year-on-year, with the average price in the North East now standing at £178,696.

This was the first time since September 2023 that the North west had not topped the table of English regions for annual growth.

London retained the highest average house price in the UK, increasing by 2.8% in January, to £548,288.

Personal finance analyst at Bestinvest, Alice Haine, warned that although prices may continue to increase, the future after April remains "uncertain".

She concluded: "While property prices are expected to increase in the run-up to the stamp duty change deadline at the end of March as buyers and sellers race to beat the tax hike - what happens from that point remains uncertain. With recession chatter back in the air and buyers facing a higher tax bill on their purchase, house price growth is likely to be more subdued if sellers are forced to cut asking prices to get deals across the line.

"The start of April, the point at which employers start paying a higher rate of National Insurance on employee salaries and a higher minimum wage, could be a crunch point for the economy if companies struggle to absorb the extra costs and choose to pass those costs onto consumers. Add in higher household bills and an ever-higher tax burden, a result of frozen personal tax thresholds, and it’s understandable that some prospective and existing property owners are still feeling under pressure."

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