House prices rose 0.6% in January, says Halifax

House prices rose 0.6% in January but are down 1.8% on last year, according to new figures from Halifax.

Property prices are also 0.9% lower in the three months to January than in the previous quarter – the fourth consecutive month that the quarterly trend has been negative.

Overall, however, house prices have changed very little in the last eight months, Halifax claims. The average UK house price is now £161,000 – very close to where it was in May at £161,039.

Martin Ellis, Halifax’s housing economist, said: ‘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’.

‘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. A recent improvement in employment trends may also have supported demand,’ he added.

Looking forward Ellis said any movement in prices will largely depend on events in the eurozone and the repercussions of developments there for the UK economy.

Providing the UK can avoid a prolonged recession, however, Halifax predicts that house prices will remain broadly stable through 2012.

However, according to Tracy Kellett, managing director of BDI Home Finders, the quarterly change of -0.9% is a much more accurate description of where the market is at than January's 0.6% rise.

'The lack of transactions and activity generally can easily exaggerate an individual month's figures,' she said.

‘Throughout 2012, we're likely to see a further widening of the North/South divide. Prices will be hit hardest where the economy is feeling it the hardest,’ she added. 

Last week Nationwide reported that house prices fell 0.2% in January. Figures from Rightmove meanwhile show that prices fell 0.8% last month, while Hometrack claimed prices remained flat.