House prices rose by 0.6% in January, according to data from the Halifax house price index. It's only the second rise in six months though, and quarterly data records a 0.9% decline in prices for the fourth consecutive month.
The average house price now sits at £160,907, just 1.8% lower than this time last year.
"Notwithstanding monthly fluctuations, the average UK house price is very close to where it was eight months ago, at around £161,000," says Martin Ellis, housing economist at Halifax. "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."
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However, prices are now 20% lower than Halifax's peak price of £201,081 in August 2007, and the housing market is unlikely to begin a recovery in 2012. The outcome of the eurozone crisis and the health of the UK economy will have an impact on prices.
"If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012," says Ellis.
"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 hardest," says Tracy Kellet, managing director of buying agent BDI Home Finders.
The number of mortgages being approved is rising though, suggesting a modest pick up in market activity. In December, 53,000 mortgages were approved, according to data from the Bank of England, contributing to approvals for the final quarter of 2011 being 3% higher than the previous quarter, and 16% higher than in the same period of 2010.