House prices rose by 1.9% during January – ending 10 consecutive months of price falls, Britain’s biggest mortgage lender said today.
The increase more than offset December’s 1.6% drop and left the average home costing £163,966, according to Halifax.
The group stressed that it was important not to place too much emphasis on any one month’s figures, but it added that there were some very early signs that market activity may be stabilising, although at quite a low level.
The annual rate of house price inflation, which measures prices in the previous three months compared with the same period a year ago, remained deep in negative territory at a new record low of minus 17.2%.
But a straight year-on-year comparison showed some signs of easing in the pace at which prices are falling.
The average home now costs 16.4% less than it did in January last year, compared with a drop of 18.9% between December 2008 and December 2007.
Martin Ellis, housing economist at Halifax, said: ‘It is always important not to place too much weight on any one month’s figures.
‘Historically, house prices have not moved in the same direction month after month even during a pronounced downturn.
‘There are some very early signs that market activity may be stabilising, albeit at quite a low level.
‘Nonetheless, continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to mean that 2009 will be a difficult year for the housing market.’
Housing affordability has improved as prices have fallen, with the average property now costing 4.48 times average earnings, down from a peak of 5.84 times in July 2007.
Anecdotal evidence suggests there has been increased activity in the housing market, as steep interest rate cuts, combined with the recent sharp fall in house prices, tempt potential buyers back.
Figures from the Bank of England showed that the number of mortgages approved for house purchase rose by 15% in December, although they are still running at less than half of the level they were at a year earlier.
© Press Association 2009
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