Halifax: Property prices flat in January

There was no change in the average price of a property in the UK, according to the Halifax House Price Survey released today.

Over the last quarter prices have fallen by one per cent – suggesting prices are moderating, but not crashing as many had feared.

According to the research annual house price inflation now stands at 4.5 per cent – down from 5.2 per cent in December and 6.2 per cent in November.

The average price of a home in the UK has increased by £7,628 over the past year, and now stands at £197,244.

The figures demonstrate there is no need to fret over the future direction of the market, according to Halifax.

"We expect sound economic fundamentals and lower interest rates to support house prices. Nationally, we predict that house prices will be flat in 2008," said Halifax chief economist, Martin Ellis.

"The UK economy recorded its 62nd successive quarter of growth in 2007 quarter four, extending the longest running period of unbroken growth on record.

"The economy is expected to continue expanding during 2008, albeit at a slower pace than in the past two years."

However, some areas of concern remain in the market.

The Bank of England finds mortgage lending was down 35 per cent in the final quarter of 2007, when compared with 2006.

Furthermore, the Royal Institution of Chartered Surveyors (Rics) finds the number of buyers has been in decline for the past 12 months – but has slowed in the past three months.

Yet, with further interest rate cuts predicted – following the 0.25 per cent cut in December – mortgage lending could increase in quarter one of 2008.

Commenting on the findings Howard Archer, of analysts Global Insight, said: "The Halifax and Nationwide data indicate, while house prices are cooling significantly, they are currently not plunging through the floor.

"Nevertheless, the housing market is clearly buckling under substantial pressure from increased affordability constraints and tightening lending practices.

"Meanwhile, the fact house prices did not plunge in January reinforces belief the Bank of England will limit a widely expected interest rate cut on Thursday to 25 basis points from 5.50 per cent to 5.25 per cent."