House price growth in Britain hit a new six-month high last month, with potential room for further growth, despite the growing cost-of-living squeeze.

The Royal Institution of Chartered Surveyors (RICS) said a net balance of +74% of its members reported an increase in residential property prices in January, up from +70% in December and its highest since July.

The report echoed other surveys that show Britain’s housing market retained much of its momentum going into 2022, despite the phasing out of the stamp duty holiday last year.

But with household budgets being squeezed by high inflation and imminent tax rises, RICS cast doubt on whether the housing market can keep up its recent strength.

“There is an inevitable question mark over the impact of rising interest rates allied to the jump in the cost of living on homebuyer sentiment,” said RICS chief economist Simon Rubinsohn.

Other house price indices also suggest that the rate of property price growth will slow in the coming months, but it is unlikely that prices will fall, owed in part to the chronic shortage of homes for sale in relation to demand.

Tom Bill, head of UK residential research at Knight Frank, commented: “It would be nice to say the UK housing market has snapped back to normal since Covid restrictions were lifted, but it hasn’t.

“Normality is returning but the pace is slow and the effects of the pandemic are likely to linger for longer. Supply has only picked up modestly in the first six weeks of the year but isn’t too far from the seasonal norm.

“The problem is that demand is unrelenting, which will continue to keep upwards pressure on prices. We will end 2022 with a healthy level of transactions and rising prices but sellers who are holding back because they can’t find purchase options of their own may need to be patient for a while longer.”

Peter Beaumont, CEO at The Mortgage Lender, concurred: “Demand continues to massively outstrip supply, and this will likely support the continued growth in house price inflation. However, growth will naturally and inevitably slow as the reality of buying a property becomes unfeasible for many. Despite the sharp growth we saw in the market in 2021 – house prices were up by a startling 9.8% last year – sellers may soon have to face the fact that the current economic environment could put the brakes on new buyer enquiries.

“With costs rising, it’s important that as lenders we are making considered and prudent assessments based on an individual’s situation. As the market reaches a pivotal point, buyers and homeowners should consider their options and speak to a broker who will help to find the right solution for them.”