'House prices rose by 0.6% in January. This was the seventh successive monthly increase and takes the average price to 9.9% above its trough in April 2009,” commented Martin Ellis, Halifax housing economist.

“January’s rise, nonetheless, was more modest than in any of the previous six months. Overall, our current view is that house prices will be flat during 2010.”

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House Prices Rise Again in January

The marked reduction in interest rates over the past 15 months has, from a low base, boosted housing demand from those with a sufficient deposit to enter the market. Increased demand has combined with a low supply of properties available for sale to push up prices. There are some signs that more people are putting their homes on the market.

Separate research released by Halifax demonstrated that the ’Noughties’ were a significant period for the UK housing market. Despite a fall of more than one fifth between mid 2007 and mid 2009, house prices increased by more in real terms than in any other decade over the last 50 years. House prices increased by 105% during the 2000s, taking the UK average house price from £81,596 in 1999 to £167,020 in 2009.

Key House Price Facts

• Prices have risen by 9.9% since reaching a low in April 2009; an increase in the average price of £15,287 over this period.
• This follows a decline of 23% between August 2007 and April 2009. The average house price is now £169,777.House prices in January were 3.6% higher on an annual basis.
• This is the largest increase in the annual rate of change - measured by the average for the latest three months against the same period a year earlier - since February 2008. The comparable rate a year ago was -17.2%.
• Housing market activity continues to pick up albeit from a low base.
• House sales in England and Wales in October were 34% higher than a year earlier, according to the latest Land Registry figures.
• Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase - a leading indicator of completed house sales - in the final three months of 2009 was significantly up on the number in the same period a year earlier (176,517 against 91,221). This was despite a marginal monthly fall (- 1.7%) in December; the first decline since November 2008.
• Approvals were still 22% lower than in December 2007.
• Low mortgage rates have reduced the burden of servicing mortgage debt.
• Nationally, typical mortgage payments for a new borrower have fallen from a peak of 48% of average disposable earnings in 2007 Quarter 3 to 32% in 2009 Quarter 4.
• Low supply of properties for sale has been another factor pushing up house prices.
• Redruth recorded the biggest price rise during the last decade (207%).

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