Martin Ellis, Halifax housing economist, repeated his view that UK property prices would see “limited movement” this year.
“The prospects for the market in 2011 are closely aligned with the performance of the wider economy. Consumer confidence has fallen recently, partly as a result of nervousness about the economic outlook,” he said.
Homeowners are increasingly reluctant to put homes on the market, which will help to support prices as long as its sustained.
Ellis added that he expects interest rates to remain very low for some time, supporting affordability for existing mortgage borrowers and those entering the market.
Mark Blackwell, managing director of xit2, said: “The Halifax index is working with a small sample taken from a tiny market. There were less than 40,000 transactions in January and that means none of the usual indexes are as reliable as they should be. They’re just too volatile to draw meaningful conclusions from monthly statistics.
“Having said that, it’s clear the housing market is bumbling along at the moment and it looks as if prices aren’t going to rise any time soon. Prices are threatened from a potential hike in the Bank rate this spring. Not only would that punish existing owner, it would also land a savage psychological blow on potential buyers.”
