UK house prices rose 6.3% in January over a 12-month period, according to HM Land Registry’s latest monthly house price index.

This continues the picture of slowed growth, following an annual 9.3% rise in the December figures.

The new average UK house price is recorded as £289,819 in January, which is £17,000 higher than a year ago, but just over £4,000 less than December. This represents a 1.1% decrease between December and January (not seasonally-adjusted), following a 0.4% decrease in December.

As always, it’s a varied picture across the countries, with average house prices rising 6.9% to £310,000 in England, 5.8% to £217,000 in Wales, 1% to £185,000 in Scotland and 10.2% to £175,000 in Northern Ireland.

Of the English regions, the highest annual percentage change was in the North East at 10%, compared to the lowest in London at 3.2%.

The slowing in the annual percentage change has been partly attributed to a fall in average UK house prices in January 2023, compared to a rise in January 2022.

Cost-of-living pressures also continue to play their part, says Quilter.

Quilter mortgage expert Karen Noye comments: “The ongoing cost-of-living crisis and increased energy bills have had a significant impact on the housing market, as did the fallout of the ill-fated mini budget, but the market has so far been more buoyant than predicted. While we have seen a dip in prices in recent months, the dramatic fall that had been rumoured is yet to materialise and the slightly more stable mortgage market could see it held off for the time being.”

Noye’s comments come with a warning that ‘further turbulence in the housing market can’t be ruled out’ following an 18% drop in residential property transactions in February compared to the year previous.

SPF Private Clients chief executive Mark Harris says: “The shock uptick in inflation after three months of falls may ring alarm bells for the Bank of England and makes another increase in base rate this month more likely.

“Swap rates, which underpin the pricing of fixed-rate mortgages, have been falling again in recent weeks, and a number of high-profile lenders have reduced fixed rates accordingly.”

Allowances should also be made for the time of year, say some.

Barrows and Forrester managing director James Forrester comments: “Before we run for the hills in fear of a housing market crash, it’s important to remember that house prices are reported on a lag and today’s figures very much portray a market emerging from the brief hibernation of the Christmas lull.”

All eyes will now be focused firmly on tomorrow’s Bank of England base rate announcement.

Octane Capital chief executive Jonathan Samuels adds: “The general consensus is that we will see yet another base rate increase tomorrow, albeit a potentially smaller jump than previous hikes, and so the cost of climbing the property ladder looks set to get that little bit more expensive.”