UK house prices dip in January as market boom begins to ‘run out of steam’
UK house prices dipped last month, the latest data showed, in the first indication that the property market boom could be running out of steam.
Average house prices across the UK fell 0.3 per cent in January compared to December, dropping to £251,968.
Experts said the month-on-month drop – the steepest since the first lockdown in April – could be an early sign that the upturn in the market is drawing to a close.
The slump pushed the typical property value down to its lowest level since October, however prices are still up around £13,000 compared to January last year, according to Halifax’s House Price Index.
UK house prices were 5.4 per cent higher than January last year.
“There are some early signs that the upturn in the housing market could be running out of steam, with the annual rate of house price inflation cooling to its lowest level since August,” Halifax managing director Russell Galley said.
He said figures for agreed sales are well above pre-pandemic levels but new instructions to sell have “decreased noticeably”.
Total stock held by estate agents has risen to its highest level since before the EU referendum in 2016.
“The stamp duty holiday has undoubtedly helped to fuel growing demand amongst households for larger properties,” Galley said.
“However, given the current time to completion across the market, transactions in the early part of 2021 probably don’t include many borrowers who expect to benefit from the stamp duty reprieve.”
He added: “How far and how deep any slowdown proves to be is a challenge to predict given the prevailing uncertainty created by the pandemic.
“With swathes of the economy still shuttered, and joblessness continuing to edge higher, on the surface this points to slower market activity and downward price pressures in the near-term.”