The average value of a UK property stood at £240,054 in January, according to the latest house price index from Halifax, marking a 4.1% increase on the same month the previous year.
On a monthly basis, it showed that house prices went up by 0.4%, following stronger gains of 1.8% and 1.2% posted in December and November respectively.
Russell Galley, managing director at Halifax – the UK’s largest mortgage lender – attributed the upturn to a “pick-up in transactions” that was consistent with a “reduction in uncertainty in the UK economy”.
But he added it was too early to say if a corner has been turned: “The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty.”
London estate agent and a former RICS chairman Jeremy Leaf said: “Halifax confirms what we have been seeing at the sharp end since just before the election – that a modest recovery is underway.”
He added: “When the country’s largest lender and provider of one of the most reliable house price indices says the market is improving, you have to take notice.”
But the accuracy of Halifax’s house price index has been called into question on several occasions over the last year as it reports much larger rises than other national indices.
This includes its closest equivalent from Nationwide building society which also uses mortgage approval data.
Nationwide’s house price index for January, for example, reported that values had risen by 1.9% on an annual basis, compared to Halifax’s 4.1%.
Nationwide is also more conservative with its £215,897 calculation of the average property value in January, compared to Halifax’s £240,054.
But for Halifax’s reported uplift to continue, the pace of property sales will need to increase, according to Leaf, and developers will need to “come out of hibernation and acquire more sites”.
Galley’s comments echo this sentiment: “While housing market activity has undoubtedly increased over recent months, the extent to which it persists will be driven by housing policy, the wider political environment and trends in the economy.”
Halifax expects the pace of house price growth this year to remain moderate, forecasting that demand is likely to continue to exceed supply.