House price rise in January but longer-term picture less rosy

Slight price rise in first month of the year but prices are down year-on-year, says Halifax.

House prices rose by 0.6% in January, according to Halifax’s latest House Price Index, but the longer-term picture isn’t looking so good.

Prices fell by 0.9% over the last three months of 2011 and are 1.8% lower than they were at this time last year. The average UK property price is £161,000, roughly the same as it was around eight months ago, when it was £161,039.

Mortgage approvals are rising slightly, says Halifax, with approvals in the final quarter of 2011 3% higher than in the previous quarter and 16% higher than they were in the last quarter of 2010.

Halifax says low interest rates are continuing to support some housing demand. But, like other commentators, it says events in the Eurozone and any repercussions for the UK will determine how well prices fare in the immediate future.

Martin Ellis, Halifax’s housing economist, said: “If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012.”

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