House price growth has been slowing over the past few months on the back of falling mortgage approvals.
However, new figures from the UK’s largest mortgage lender have revealed a reversal to this trend, with a sharp rise in house prices.
Sharp house price rise
According to the Halifax, house prices rose by 2% in January, the highest rise in the first month of the year, for the past six years.
Over the past quarter prices are up 1.9% and have risen by 8.5% over the past year, taking the value of the average home to £193,130.
Experts believe that a combination of rising wages, low interest rates and reforms to stamp duty are behind the price rises in January.
Furthermore the number of mortgage approvals, a key driver of the housing market, rose by 2% in December and January after five successive monthly falls.
Martin Ellis, Housing Economist at the Halifax, said: “”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.” (Source: Halifax)