House price growth fell to an increase of just 0.3% in January, the lowest rise since June 2021, while growth remained steady on an annual basis at 9.7%.

Transaction levels rebounded to those seen before the pandemic, and overall, prices were up £24,500 compared to this time last year. They were £37,000 higher than in 2019.

“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,” says Halifax managing director Russell Galley.

“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.”

In quarterly times, house prices increased 3.1%. According to Quilter mortgage expert Karen Noye, the deceleration of house prices over the month was expected, as energy prices, inflationary pressure and imminent interest rate hikes continue to threaten consumer financial stability, leading to fewer property purchases.

“Any predictions that house prices were going to start to pull back once the stamp duty holiday was no longer in play have been proved very wrong,” says Noye.

“However, the Halifax house price index released today shows that significant house price rises are starting to slow with only a 0.3% month on month rise, which is the lowest since June 2021. While forecasts of a housing price reduction have not yet fully materialised, it seems inevitable that there will be some sort of slowdown in the coming year.”

Nevertheless, London estate and lettings agent Chestertons says record purchases in January indicate house prices are set to remain high during the first half of the year, driven partially by the return to offices.

“London’s property market has continued to see record numbers of buyers throughout January. A strong indication that the market will remain at high activity levels in the first half of this year,” says Chestertons chief executive Guy Gittins.

“Whilst larger properties or homes with outside space remain sought-after, apartments in some of London’s more central boroughs are experiencing a steady comeback. This is particularly driven by professionals who are returning to the office and are seeking a home nearby,” he adds.