January was the second consecutive month growth exceeded one per cent following December’s 1.4 per cent increase, the house price index showed. For the 12 months before this, house prices failed to break the one per cent barrier.
Month-on-month, house prices in the UK rose by 0.5 per cent.
Robert Gardner, chief economist at Nationwide, said: “The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.
“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”
No help for ‘generation rent’
Steve Seal, managing director at Bluestone Mortgages, said while the “modest house price growth” would be welcomed by some, there were still customers “struggling to get over the first hurdle” of home ownership of raising a deposit.
Josef Wasinski, co-founder of Wayhome, said the growth in prices did “nothing to ease the frustrations of those reluctant renters hoping to buy their first home”.
He added: “For many, there is little choice but to remain part of ‘generation rent’ amid an increasing struggle to raise the typical standard 10 percent deposit in order to get on the ladder.
“The truth is that we need real innovation in the property market to level the playing field and help those hardworking, credit-worthy people who want to own their own home. The government needs to remember its manifesto promises and provide support to those aiming to make the next step.”
Reform needed to shift transactions
Ben Johnston, director of Houso, the off-market property app, said: “The underlying issue is the lack of transactional volume.
“Stamp duty is the key to getting some fluidity in the market. A temporary reduction to tempt those waiting to move would help, particularly with the downsizing market who are typically aged 55-plus. But there also needs to be more focus on building homes that are suitable for this market.”
Guy Harrington, CEO of Glenhawk, added: “Until the government takes concrete steps to support homeownership at all levels, starting with stamp duty reform on 11 March, structural headwinds will prevent any sort of meaningful housing market recovery.”