House prices back on the rise during January

House prices rose 2% last month, signifying a “bounce-back” in the market and the largest January rise since 2009, according to Halifax.
There was a similar rise in the quarterly figure, with prices in the three months to the end of January up 1.9% on the preceding three months, and Halifax’s house price index reports that prices are now up 8.5% on a year ago.
“This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December,” said Halifax housing economist Martin Ellis.
“These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market.”
However, he added: “It is too early to draw any firm conclusions. The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year, and there have been unusually large rises on occasion in the past.”
Analysts said the figures showed there was still life in the housing market.
Alex Gosling, of House Simple, said: “Modest though it is, this rally confirms that the housing market is pausing for thought, not petering out.
“After five straight months of falling numbers of mortgage approvals, lending is on the up again as more would-be buyers get off the fence.
“While the monthly rise in prices of 2% should be taken with a pinch of salt as the number of sales in January is relatively low, the uptick in both the quarterly and annual rates of price growth suggests that buyer confidence is undimmed.”
Rob Weaver, of Property Partner, said: “A strong January and the first quarterly rise for six months could suggest another buoyant year, but I suspect we are more likely to see a period of gentle and sustained growth.
“Economic conditions at home remain stable, employment is up, interest rates are low and the cost of living has fallen sharply.
“Borrowers are also continuing to take advantage of cheap mortgage rates, and this is supporting demand.”