After increases of 1.2 per cent and 1.8 per cent in November and December respectively, this was a return to the trend generally seen for much of the last two years where house price growth has hovered around zero.
The Halifax house price index showed the average residential property in the UK was worth £240,054 last month, up 0.4 per cent from £238,998 in December.
In annual terms, house prices were 4.1 per cent higher than January 2019 when the average property was worth £230,784.
This rate was up marginally from the four per cent annual increase reported in December.
The strong growth of the previous two months was reflected in the quarterly rise of 2.3 per cent being the highest three-month spell in more than a year.
Pent-up activity
Halifax managing director Russell Galley was cautiously optimistic about the figures, noting a number of important market indicators continue to show signs of improvement.
“We have seen a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy. However, it’s too early to say if a corner has been turned,” he said.
“The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty.
“So while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy.”
He added that the lender was still expecting a moderate rate of house price growth over the course of the year.
“Demand is likely to continue to exceed the supply of properties for sale across the UK, with the subdued pace of new building also adding to upwards price pressure,” he continued.
“The environment for mortgage affordability should stay largely favourable. However, with the growth in rental costs accelerating, many first-time buyers will continue to face a significant challenge in raising necessary deposits.”
