By Daniel Hunter
House price growth remains weak on an underlying basis, despite prices rising by 0.6% in January, according to the latest Halifax House Price Index.
"House prices in the three months to January were 0.9% lower than in the previous three months. Despite the slight downward movement in the underlying trend, prices increased by 0.6% in January," Martin Ellis, Housing Economist, said.
"Notwithstanding monthly fluctuations, the average UK house price is very close to where it was eight months' ago, at around £161,000. The continuing very low level of interest rates has helped to support housing demand, resulting in little overall movement in house prices since last spring."
- House prices in the three months to January were 0.9% lower than in the preceding three months. This was the fourth consecutive month that this measure of the underlying trend has been slightly negative.
- On a monthly basis, house prices increased by 0.6% in January. This was the second rise in the past six months and the first since October.
- Prices in the three months to January were 1.8% lower than in the same period a year earlier. This measure of the annual rate has edged lower in the last two months from -1.0% in November, but is still comfortably above the recent low point of -4.2% in May 2011.
- Overall, house prices have changed little in the past eight months. The UK average price in January, at £160,907, was very similar to that in May 2011 (£161,039).
"Low rates have contributed to mortgage payments falling to their lowest level as a proportion of disposable earnings for a new borrower for 14 years," Ellis continued.
"A recent improvement in employment trends may also have supported demand.
"Prospects for house prices over the coming months will, to a large extent, depend on events in the Eurozone and the repercussions of developments there for the UK economy. If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012."
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