UK house prices unexpectedly pick up in January - Halifax

UK house prices unexpectedly rose in January, according to the latest figures from mortgage lender Halifax.

House prices ticked up 0.4% on the month, down from a 1.8% increase the month before but ahead of expectations for a flat reading.

On the year, prices rose 4.1%, up from 4% in December and above expectations of 3% growth. The quarterly increase was 2.3%, up from 1% growth in the previous three months.

Halifax managing director Russell Galley said: "A number of important market indicators continue to show signs of improvement. We have seen a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy. However, it’s too early to say if a corner has been turned. The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty. So while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy.

"Looking ahead, we still expect a moderate rate of house price growth over the course of the year. Demand is likely to continue to exceed the supply of properties for sale across the UK, with the subdued pace of new building also adding to upwards price pressure. The environment for mortgage affordability should stay largely favourable. However with the growth in rental costs accelerating, many first-time buyers will continue to face a significant challenge in raising necessary deposits."

Anna Clare Harper, co-founder of property fund Anglo Residential, said: "Confidence has been low due to political uncertainty since the 2016 referendum but January’s data suggests greater confidence - reflecting the ‘Boris bounce’ and greater certainty around Brexit.

"t’s likely that the uptick in pricing is based on a release both of pent-up demand and supply. The data masks a fundamental shortage of properties priced at affordable levels in the places where people want and need to live, however. It also masks who is buying - more first-time buyers and fewer landlords."