The survey points out that January’s rise is 1.1% below the revised rate of 7.1% seen in December, which itself was 5.8% below the 12.9% recorded last August.   

It adds that annual growth rates have fallen for five months in a row “demonstrating that annual rates of house price growth in England and Wales have been slowing since the summer months of 2022, and are now less than half of the rate seen at the peak of the recent growth in prices in 2022.”   

The monthly growth rate in the average house price for England and Wales in January was 0.1%, falling from 0.2% the previous month.    

Mortgage borrowers are “enduring significant increases in the cost of borrowing and this is curtailing their activity,” the report says.  

The survey comes after the Bank of England lifted the base rate by 50 basis points to 4% last week, a 14-year high, and while inflation stands at 10.5%, more than five times higher than the central bank’s 2% target.   

But the housing survey adds: “We are now just over five weeks away from the 15 March Budget, and all the signs are that it will contain some housing market initiatives as the government seeks to claw back public support.   

“The Budget might therefore add further momentum to a somewhat more positive outlook, which in turn could mean that a longer and more damaging housing market downturn could be avoided.   

“Interest rates, wages and unemployment will be the big drivers. Mortgage pricing has settled down, and market competition has intensified.”  

The East and West Midlands, as was the case last month, remain the top two regions with the highest annual rates of price growth, posting 11.0% and 10.3% rises, respectively.  

Greater London has the lowest annual growth rate of 0.6%.  

The study adds that in December, four regions reported monthly price falls: North East, with a 0.8% drop, Yorkshire and the Humberside falling by 0.2%, the East Midlands down by 0.2%, and the West Midlands at 0.1% lower. 

The report points out that the new average house price record of £378,277 across England and Wales shows that “at present average prices are still rising across England and Wales, even if some areas are beginning to experience price falls”.