While housing prices increased for a second consecutive month in January, Halifax's monthly index found that annual rate ground to its weakest growth in three years.
According to Halifax, house prices inflation saw a slight increase of 0.8% in January, adding to the 1.4% increase in the past six months and a 13.7% yearly increase to January, in comparison to a peak in inflation of 22.1% in July 2004, making January 2005 is the lowest annual increase since December 2001.
The mortgage lender says the housing market has subsided by a third since May last year, contrary to the most recent figures from the Bank of England and RICS, suggesting a dearth in the housing market may be leveling out.
In January, the Royal Institute of Chartered Surveyors (RICS) after a survey reported residential house prices fell more slowly in December than in the previous three months.
It adds: “The housing market is underpinned by strong economic fundamentals. The UK economy grew by 3.1% during 2004, the fastest rate of growth for four years. The strength of the economy has been reflected in the labour market with the number of people in employment in the three months to November up 271,000 compared with a year earlier.”
Martin Ellis, chief economist says: “The housing market continues to slow with the annual rate of house price inflation easing further in January. The reduction in house price growth and activity since mid 2004 has been a result of the increasing affordability difficulties facing first-time buyers and the rise in interest rates since late 2003, which have curbed housing demand.”
The average price of a home, meanwhile, jumped up again to a seasonally-adjusted £163,748 in January, from £162,493 in December.IFAonline
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