House prices in the UK have risen by 9.7% compared with January 2015.
The average price of a house in the UK now stands at £212,430 – up 1.7% since December 2015 when the average house cost £208,943.
Martin Ellis, Halifax’s housing economist, says: “The imbalance between supply and demand continues to exert significant upward pressure on house prices. This situation looks set to persist over the coming months.
“Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.”
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Commenting on the Halifax House Price Index, Jonathan Hopper, managing director of buying agent Garrington Property Finders, says: “Slowdown? What slowdown? Such robust price growth in January suggests the property market hit the ground running after the traditional Christmas lull.
“With the quarterly rate of house price inflation breaching 2% again, and the annual level now within touching distance of double digits, there is clearly plenty of momentum in price growth.
“True, demand in the first quarter of 2016 is being stoked by a rush among second home and buy-to-let buyers to complete before April’s stamp duty hike kicks in. But the impetus this short-term factor provides is a sideshow compared to the fundamental driver of Britain’s relentlessly rising prices – a chronic shortage of supply.”
Jeremy Duncombe, a director at Legal & General Mortgage Club, shares this view: “Although house price growth may seem more subdued on a monthly basis compared to the more significant surges seen in previous years, it’s important to look at the long- term trends. House prices are still significantly up on the same period last year and are continuing to climb at a rate that far exceeds inflation and wage growth. This is eroding people’s ability to get on the property ladder, as the average asking price is rising faster than prospective buyers can save money for a deposit.
“This trend is likely to continue well into 2016 unless more properties are built to cope with current levels of demand. The government and housebuilders must work together to develop a long-term solution to this issue by implementing a range of measures to boost housing supply. At the same time, we need to ensure that there is an adequate supply of suitable properties for home-movers in order to create a more fluid housing market and encourage more efficient use of current housing stock.”