UK house prices rise more than expected in January, says Nationwide

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UK house prices rose more than expected in January, according to mortgage provider Nationwide, as easing mortgage rates helped to stabilise the property market.

House prices increased 0.7 per cent between December and January, the fastest pace since October, data published on Wednesday showed.

The figure was much higher than the 0.1 per cent increase forecast by economists polled by Reuters and took the average house price to £257,656.

Jake Stott, founder of Manchester-based broker Mondo Mortgages, said the increase in the Nationwide data “highlights the optimism that is emerging after a turbulent 2023”.

“Since lenders decided to slash rates right from the start of the month, we’ve seen first-time buyers popping up like daffodils in spring,” he added.

The data offers further signs that the UK property market is improving as mortgage rates ease on expectations that the Bank of England will cut interest rates this year.

The housing market’s resilience indicates a more positive outlook for the wider economy and will be closely monitored by policymakers ahead of the BoE meeting on Thursday, when the bank is widely expected to hold the benchmark rate at a 15-year high of 5.25 per cent.

On Tuesday the BoE showed that the average rate for new mortgages fell in December for the first time since November 2021 and that mortgage approvals rose to a six-month high.

Rates on popular deals, such as two-year fixed mortgage rates with 60 per cent loan to value, have eased from the summer, reflecting expectations of lower borrowing costs.

Robert Gardner, Nationwide’s chief economist, said: “There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down.”

Experts also noted that rising real wages and easing inflation from the peak in 2022 also helped to support house prices.

In January the annual…