UK house prices fell 2.9% in January
Average UK house prices fell by 2.9% in January, following a 2.5% rise in December, according to Halifax.
This takes the average house price down to £223,691.
The fall dragged down longer-term measures, with prices in the three months to January just 0.8% higher than in the same three months a year earlier.
Negative quarterly growth
Quarterly growth – which is usually less volatile than monthly movements – is now negative. House prices in the latest quarter (November-January) were 0.6% lower than in the preceding three months.
Russell Galley, managing director of Halifax, said: “This could either be viewed as a story of resilience, as prices have held up well in the face of significant economic uncertainty, or as a continuation of the slow growth we’ve witnessed over recent years.
“There’s no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have. However, more fundamentally it is key underlying factors of supply and demand that will ultimately shape the market.
“On the supply side the most constraining factor to the health of the market is the shortage of stock for sale, although this does support price levels. On the demand side we see very high employment levels, improving real wage growth, low inflation and low mortgage rates. All positive drivers tempered by the challenges of raising deposits. On balance therefore we expect price growth to remain subdued in the near term.”
Lucy Pendleton, founder director of estate agents James Pendleton, added: “This is a handbrake turn as the monthly course of house prices reaches new heights of volatility.
“The rarified air of political uncertainty and low supply is sending the market into a bit of a spin.
“The long-term holding pattern in prices ahead of Brexit is abundantly clear and overall measures of consumer confidence have been scraping five-year lows. However, if the UK does enjoy a good EU exit, then a relief rally could be in store given the plentiful government support for buyers, cheap borrowing and rising wages coupled with low supply.”