House prices fall by 0.9% in January: Halifax

Annual house price growth in the three months to January eased to 5.7% from 6.5% in December. The annual rate is now well below the 10.0% peak reached in March 2016.

Martin Ellis, Halifax housing economist, said: “House prices in the three months to January were 2.4% higher than in the previous quarter; marginally down on 2.5% in December. The annual rate of growth eased to 5.7% from December’s 6.5%, and is well below last March’s peak of 10.0%.

“The quarterly and annual rates of house price growth remain robust even though they are lower than in spring 2016. UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. These factors are unlikely to change materially during 2017. Nonetheless, weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in some downward pressure on annual house price growth during the year.”

Jeremy Leaf, former RICS residential chairman, commented: "The Halifax figures are interesting from the monthly as well as the quarterly perspective as they show a broadly slowing market in response not just to seasonal but other factors, which we have also noticed in our offices. Worries about rising inflation and what this means for general living costs and interest rates, as well as stricter mortgage criteria and the focus on affordability, are having an impact on people’s decision-making.

"Low levels of housebuilding continue to prop up house prices and while proposals in the White Paper may attempt to address this, the reality is that it is unlikely to change anytime soon. There is no early prospect of any meaningful changes in the short term - it really is a long-term project which won’t so much help this generation of first-time buyers as the next one."