House prices in England and Wales will recover from a December dip in the first two months of next year, analysis from Reallymoving shows.

The firm says that following a monthly fall of 1.1% in December, house prices should rise by 2.5% in January 2022 and by 0.2% the following month.

This equates to an average house price of £342,900 in February, which compares to an average house price of £333,960 today.

Further data from Reallymoving shows that ten our of 12 UK regions will see a price increase across December 2021 to February 2022, with prices in the East of England projected to rise by 10.1% and by 11.7% in Northern Ireland.

It expects prices to fall by 4.6% across the same time frame in Yorkshire and the Humber and by 1.9% in the South East.

Reallymoving bases its projections on the purchase prices it captures when home buyers search for conveyancing quotes and other moving-related services on its comparison platform.

Buyers typically search for quotes three months before their purchase completes, which provides an indicator of house price trends over the months ahead.

Reallymoving chief executive Rob Houghton says: “House price growth in the new year is inevitable based on transactions already underway, following a strong market performance in the autumn when a lack of stock and  continued high levels of buyer demand helped support prices.

“As we head towards Christmas there are a number of headwinds with the potential to impact buyer sentiment, not least the spread of Omicron which brings renewed uncertainty and concern over jobs, inflation and economic growth.

“Although interest rates remain very low, the first rise feels significant and shows that despite the escalating Covid-19 situation, the Bank of England won’t wait to tackle rising inflation.

“Rising borrowing costs will impact the affordability of first-time buyers coming to market and those in a position to buy soon may be more tempted to press ahead and secure a fixed rate deal as quickly as possible.”