UK house price houses rise by more than expected in January

(Alliance News) - UK house prices edged higher in January, according to figures from Nationwide on Wednesday.

The Nationwide house price index showed a 0.7% increase in seasonally-adjusted UK house prices in January, after showing no change in December. According to FXStreet, market consensus expected the house price index to edge up 0.1% on-month.

In January, the average UK house price stood at GBP257,656, up slightly from GBP257,443 in December, without seasonal adjustment.

Annually, the house price index edged down 0.2%, slowing from a 1.8% decline in December. This came in lower than consensus, with markets pencilling in a 0.9% fell.

"There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down. This follows a shift in view amongst investors around the future path of Bank Rate, with investors becoming more optimistic that the Bank of England will lower rates in the years ahead," said Robert Gardner, Nationwide's chief economist.

"These shifts are important as this led to a decline in the longer-term interest rates (swap rates) that underpin mortgage pricing around the turn of the year. However, the partial reversal in recent weeks in response to stronger than expected inflation and activity data cautions that the interest rate outlook remains highly uncertain."

By Sophie Rose, Alliance News senior reporter

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