The UK housing market is at an “inflection point”, which means mixed signals for buyers and sellers, according to Tom Bill, head of UK residential research at Knight Frank.

He points out that inflation has fallen quickly and sent the cheapest mortgage rates below 4%, but some housing market data has been slow to catch up. Three separate announcements last week captured this fact perfectly.

Bill said: “The growing sense of positivity was evident when Nationwide announced that house prices had risen 0.7% in the month to January, narrowing the annual decline of 0.2%. However, when the Bank of England said mortgage approvals had crept higher in December, there was only a hint of good news. And HMRC was positively gloomy by comparison when it announced that housing transactions had fallen in December. Step back from the numbers though, and the three announcements tell you more about how long it takes to buy a house than anything else.

“As lagging indicators turn more positive, Knight Frank expect sales volumes to increase alongside house prices this year. There should even be a noticeable spring bounce provided Rishi Sunak can stick to his preferred timetable of an election later in the year.

“Leading indicators have also turned more positive in prime London postcodes. The number of market valuation appraisals requested by prospective sellers was 15% higher in prime central and prime outer London in January compared to the same month last year. Furthermore, the number of new buyers registering was up by 8%, Knight Frank data shows.”

Meanwhile, the number of sales instructions was down by 16% and exchanges were 17% lower, reflecting the discrepancy between leading and lagging indicators.

“After being a buyers’ market for seven years, it’s not going to change overnight,” said Stuart Bailey, head of prime central London sales at Knight Frank. “Activity is not yet in sync with the more positive sentiment we are detecting.”

Average prices in prime central London were down by 1% on the quarter, taking the annual decline to -2.3% in January. Meanwhile, prices were flat in prime outer London, which narrowed the average annual fall to 1.5%.

While the economic picture has become more settled and mortgage rates have fallen, political volatility is rising. The risk of Tory infighting and an early election may grow later this month depending on the results of two by-elections. Not that recent polls have left people in much doubt about the likely outcome of this year’s general election.

“People are aware of what the polls have been showing for some time and I think an assumed Labour victory is largely priced into their decision-making,” said Stuart.