House prices in January rose at their slowest monthly pace since June last year as a post-lockdown boom in the housing market started to fade and a growing cost-of-living squeeze is likely to add a further brake, mortgage lender Halifax said.

House prices in January rose by 0.3% from December, Halifax said although the annual rate of growth remains steady at 9.7%

Russell Galley, managing director at Halifax, said

“House price growth slowed somewhat at the start of the year, rising by just 0.3% in January, the smallest monthly increase since June 2021. This followed four consecutive months of gains above 1%, and with annual growth remaining at 9.7%, the
average UK house price was little changed, edging up slightly to a new record high of £276,759.

Overall prices remain around £24,500 up on this time last year, and £37,500 higher than two years ago.“Following the peak activity of 2021, transaction volumes are returning to more normal levels. Affordability remains at historically low levels as house price rises continue to outstrip earnings growth. Despite record levels of first-time buyers
stepping onto the ladder last year, younger generations still face significant barriers to home ownership as deposit requirements remain challenging.

“This situation is expected to become more acute in the short-term as household budgets face even greater pressure from an increase in the cost of living, and rises in interest rates begin to feed through to mortgage rates. While the limited supply of new housing stock to the market will continue to provide some support to house prices, it remains likely that the rate of house price growth will slow considerably over the next year.”

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