UK house prices rose by 0.8% in January

House Prices

House prices in Britain rose slightly last month.

Home owners are reluctant to place their property on the market while prices remain low.

UK house prices increased by 0.8% in January. However, the figures were still 2.4% lower than the same period last year, according to the Halifax.

The statistics revealed by the Lloyds Banking Group lender highlight that the average price of a British home now stands at £164,173.

Halifax’s housing economist Martin Ellis said: “We expect limited movement in house prices overall this year. There are, however, likely to be some monthly fluctuations with the risks on the downside”.

He continued: “The prospects for the market in 2011 are closely aligned with the performance of the wider economy. Consumer confidence has fallen recently, partly as a result of nervousness about the economic outlook”.

Despite the increase at the start of this year, prices in the three months to the end of January were still 0.7% lower than the previous three months. Teamed with low interest rates, this steady overall decline has meant that fewer home owners have placed their houses on the property market – they hope to secure a more favourable price on their homes in the future once the economy begins to improve.

Mr Ellis said: “This development should help to relieve downward pressures on prices as long as it is sustained. We also expect interest rates to remain very low for some time, supporting a favourable affordability position for many existing mortgage borrowers and those entering the market”.