Halifax reports 0.6% rise in house prices in January

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by Kay Murchie

The Halifax has today revealed a 0.6% rise in house prices for the month of January compared with December.

The latest price gain takes the annual increase to 3.6% with the average UK home costing £169,777.

According to the Halifax, which is now owned by the Lloyds Banking Group, it was the seventh consecutive month that property prices have risen.

In comparison, last week, the Nationwide Building Society said house prices rose 1.2% in January compared with the previous month.

The latest price gain takes the annual increase to 8.6% with the average UK home costing £163,481, according to the Nationwide.

Many analysts have been surprised by the strength in house prices over the last six months or so after several leading experts had predicted falls of around 10% for the 2009 year.

However, house prices rose in the latter half of the year as a result of higher demand and a shortage of properties up for sale.

The housing market is one are that has recovered well in the struggling economy. Official figures last week revealed that the UK economy grew by 0.1% between the October and December period, suggesting that the economy has finally emerged from its worst recession since records began in 1955.

However, economists had expected growth of around 0.4%.

Meanwhile returning to the Halifax, the lender expects prices to stay flat overall in 2010.

The Halifax’s housing economist, Martin Ellis, said that January’s rise was more modest than in any of the previous six months. T

Commenting on the figures, he said: “The marked reduction in interest rates over the past 15 months has, from a low base, boosted housing demand from those with a sufficient deposit to enter the market.”

He continued: “Increased demand has combined with a low supply of properties available for sale to push up prices.”

In related news today, the Bank of England has elected to keep interest rates at the historically low level of 0.5%.