Annual house price growth jumped to a 14-month high this month, according to Nationwide Building Society.
Across the UK, property values were 1.9% higher than a year earlier, marking the strongest annual growth since November 2018, when it was also at 1.9%. The average house price in January stands at £215,897 – 0.5% higher than in December.
Robert Gardner, Nationwide’s chief economist, said: “January saw a further modest pickup in annual UK house price growth to 1.9%, from 1.4% in December.
“This follows 12 successive months in which annual price growth had been below 1%.
“Indicators of UK economic activity were fairly volatile for much of 2019 but the underlying pace of growth slowed through the year as a result of weaker global growth and an intensification of Brexit uncertainty.
“Recent data continues to paint a mixed picture. Economic growth appeared to grind to a halt as 2019 drew to a close, though business surveys point to a pickup at the start of the new year.”
Gardner continued: “The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.”
Looking ahead, economic developments will remain a key driver of housing market trends, he said.
“Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts, as well as the outlook for global growth.
“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”
Some other economists are expecting to see stronger growth in house prices this year.
Highlighting other reports that have shown a recent jump in new-buyer inquiries to estate agents, Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said: “Indicators of demand at the very start of the homebuying process are red-hot.
“We think the pickup in demand can be sustained this year by the continuation of low mortgage rates and solid wage growth, driving prices up by about 4%.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, said: “The real test for the market will come in February and March when we will see if that interest translates into higher transaction levels.
“Prices are likely to continue to be underpinned by a shortage of supply and relatively low levels of housebuilding, while ongoing difficulties trying to raise deposits – evidenced by the struggles still facing first-time buyers – will keep demand in check.”
