A year-on-year comparison shows that prices in the three months to January were 8.5% stronger than a year earlier. This was an increase from 7.8% in December.
Although the growth was healthy, it still remains significantly below the peak of 10.2% in July 2014.
Between December and January house prices grew by 2.0%, the biggest January monthly increase since 2009 when it reached 2.4%.
Over the course of 2014 home sales grew by 15%, reaching 1.23 million. This was the the highest annual total since 2007. However, despite this annual rise, sales peaked in Q1 before steadily declining during the course of the year. Sales in Q4 were 5% lower than Q1 and 1% lower than Q3.
The volume of mortgage approvals for house purchases grew by 2% between November and December. The rise put to an end five successive monthly falls, a possible indication that the recent downward trend may be coming to an end.
According to the latest data from the Royal Institution of Chartered Surveyors’, agreed sales remained stable in the last month of the year following four successive monthly falls. Whilst demand on average has weakened in recent months, supply remains very tight with new instructions falling for the fifth consecutive month in December.
In the report Halifax also suggested that they expect house price growth to moderate during 2015.
Martin Ellis, housing economist, had this to say:
"House prices in the three months to January were 1.9% higher than in the preceding three months. This was the first increase in the quarterly rate of increase for six months. Annual price growth also picked up, to 8.5% from 7.8% in December, but remained significantly below last July’s peak of 10.2%.
This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December. These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market. It is, however, too early to draw any firm conclusions. The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year and there have been unusually large rises on occasion in the past, such as in 2007 (2.3%) and 2009 (2.4%).
Housing demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households’ spending power resulting from lower consumer price inflation and reduced fuel bills. Nonetheless, we expect the overall downward trend in house price growth seen since last summer to continue over the coming months. Nationally, house prices are predicted to increase in a range of 3 to 5% in 2015 compared with 8% last year."
