Despite the month-on-month rise, house prices were down 1.8% annually and down 0.9% on the quarter. Halifax said the average price of a house in January was £160,907.
“Notwithstanding monthly fluctuations, the average UK house price is very close to where it was eight months ago, at around £161,000,” said Martin Ellis, housing economist at Halifax.
“Low interest rates have seen mortgage payments fall to their lowest level as a proportion of disposable earnings for a new borrower for 14 years,” he added.
Looking ahead, Ellis said: “If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012.”
Halifax said prospects for house prices over the coming months will depend on events in the eurozone and the repercussions of developments there for the UK economy.
Tracy Kellett, managing director of UK buying agent, BDI Home Finders said the quarterly change of -0.9% is a more accurate description of where the market is at than January’s 0.6% rise.
“The lack of transactions and activity generally can easily exaggerate an individual month’s figures.”
Kellett added that when interest rates go up, house prices could fall “sharper and faster.”
“Bizarre as it may seem, now may be a better time to sell than in two years’ time when rates are cycling up.
“Unfortunately, there’s an entrenched belief among homeowners that if they stick in there for a year or two, house prices will rise. In the short to medium term, I can’t see that happening.”
Last week, Nationwide’s house price index showed that prices fell 0.2% in January, matching the fall in December.
