British house prices in January rose at their slowest monthly pace since June last year as a post-lockdown boom in the housing market started to fade and a growing cost-of-living squeeze is likely to add a further brake, mortgage lender Halifax said.
House prices in January rose by 0.3 per cent from December, Halifax said on Monday.
Russell Galley, managing director at Halifax, said “it remains likely that the rate of house price growth will slow considerably over the next year” even as the limited supply of houses for sale will provide some support to prices.
Affordability was still at historically low levels as house price rises outstripped earnings growth, and younger buyers faced challenging deposit requirements, he said.
“This situation is expected to become more acute in the short-term as household budgets face even greater pressure from an increase in the cost of living, and rises in interest rates begin to feed through to mortgage rates,” Galley said.
Last week, the Bank of England raised interest rates for the second time in two months – albeit to a level still below that before the pandemic struck – as it s ought to head off inflation running at a 30-year high.
Workers also face higher tax payments from April.
Compared with January last year, house prices were 9.7 per cent higher than a year earlier, matching December’s annual pace of increase, Halifax said. – Reuters