By Marcus Leach

According to the Nationwide house prices started the new year with a slight decline, falling by 0.2% in January compared with the previous month.

Nationwide went on to say that the cost of a typical home is now £162,228, and the annual rate of house price growth slowed to 0.6% in January, from 1% in December

“Given the challenging conditions prevailing in late 2011, with the UK economy contracting in the final three months of the year, it’s not surprising that house price growth softened at the start of 2012," Robert Gardner, Nationwide's Chief Economist, said.

"The price of a typical house fell by 0.2% in January, taking the annual rate of house inflation down to 0.6% from 1% in December.

“The demand/supply balance may move further in favour of buyers in the months ahead. The economy is not expected to gather much momentum until the second half of 2012 at the earliest, which suggests that labour market conditions and buyer sentiment may be slow to improve.

“Nevertheless, with the flow of properties coming onto the market still more of a trickle than a flood, house prices are likely to continue to move sideways or only modestly lower in the months ahead.“

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