House prices dipped by 0.5 per cent in January compared to the previous month, but were 7.5 per cent higher than they were a year earlier, the latest figures from the Office for National Statistics reveal.
The month-on-month fall in prices to £249,309 was the first for nine months as annual growth slowed from 8 per cent in December.
Wales saw the strongest annual increase, with prices up 9.6 per cent to £179,000, followed by England where prices rose by 7.5 per cent to £267,000.
In Scotland prices increased 6.9 per cent to £164,000 and in Northern Ireland they climbed 5.3 per cent to £148,000.
The North West was the English region which saw the highest annual growth at 12 per cent, while the West Midlands saw the lowest at 4.7 per cent.
Coreco managing director Andrew Montlake says: “Prices may have eased slightly in January but the market was still being driven on by the desire of buyers to benefit from the Stamp Duty holiday.
“The extension and phasing out of the Stamp Duty holiday, coupled with government backing of 95 per cent loan-to-value mortgages, will continue to drive transactions during 2021.
“There’s also the small fact that it’s still considerably cheaper to own than to rent.
“The Covid-19 pandemic has triggered a massive rethink among homeowners and prospective homebuyers and this will continue to support demand and activity levels throughout 2021.
“The rules of the game have changed.
“Properties that were perfect a year ago are often no longer what people want as work and life priorities have been turned upside down.”
Lettings platform Canopy’s chief executive Tahir Farooqui says: “With a further increase to house prices comes an even bigger gap between hopeful first-time buyers and their new home.
“While the government is promoting a range of incentives such as 95 per cent mortgages and a tapered end to the stamp duty holiday, it’s not addressing the true problem.
“House prices are too high and securing an affordable mortgage is a pipe-dream for many.”
SPF Private Clients chief executive Mark Harris points out that the index pre-dates the chancellor’s stamp duty holiday extension.
He says: “There may have been buyers who took their foot off the gas in the belief that they were too late to take advantage.
“This data is a little historic – with the continuing stamp duty incentive, ready supply of cheap finance, consumer requirements and returning pockets of buyer segments, such as those requiring high loan-to-value loans, we should continue to see positive growth for a while to come.”
