Halifax reports 0.6% rise in house prices

English town

House prices increased by 0.6% during January, bringing the value of an average property to £169,777.

The latest UK house price index from Halifax shows that values are now up 3.6% on an annual basis, with January recording the seventh consecutive monthly rise.

Prices have risen by 9.9% since reaching a low in April 2009, the mortgage bank report. This follows a decline of 23% between August 2007 and April 2009. 

Martin Ellis, housing economist at Halifax, says: "January was the seventh successive monthly increase and takes the average price to 9.9% above its trough in April 2009.”

However, he adds that January's rise was “more modest” than in any of the previous six months.

Increased demand for property, combined with low interest rates and a low supply of properties available for sale, have helped push up prices.

Ellis says there are some signs that more people are putting their homes on the market - a move that could curb house price inflation.

“Overall, our current view is that house prices will be flat during 2010," he says.

Nationwide recently reported a 1.2% rise in property values in January, and an 8.6% annual rise. It also expects to see a double-digit rise in February.

Housing economists remain divided over the outlook for house prices in 2010.

The Centre for Economic and Business Research recently forecast a 6% jump in values in 2010. 

However, Ed Stansfield, chief property economist at Capital Economics, argues that rising house prices - alongside the impact of redundancy, pay freezes and more part-time workers - makes it harder for buyers to raise the necessary deposit to purchase property.

As a result, he says house prices are actually likely to fall later this year.