House prices rose by 1.3 per cent in January, bucking the 0.9 per cent downward December trend which had elicited optimistic forecasts that base rate rises were taking effect, Halifax has reported.
The average house price rose by more than £2,440, reaching £188,623, while the three-month annual rate of growth held at 9.9 per cent – the highest level since March 2004.
Nevertheless, analysts have intimated that the figures cannot account for the possible cooling effect of the surprise January rate rise.
Howard Archer, chief economist at Global Insight, appealed for the December and January data from the Halifax to be "taken together", suggesting to Reuters that they might jointly indicate that "house prices could be beginning to come off the boil".
Moreover, Halifax chief economist Martin Ellis remained positive, predicting that constraining factors would cause annual growth rates to fall to four per cent by the end of the year.
"Negative real average earnings growth ... combined with higher interest rates and slower economic growth will squeeze householders' finances, causing potential homebuyers to be more cautious and constraining housing demand," he predicted. For more information on UK property, click here.
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