UK house prices beat expectations in January

BRITISH house prices rose more than economists had expected in January, adding to signs that the squeeze from high interest rates is beginning to ease, figures from mortgage lender Nationwide Building Society showed on Wednesday (Jan 31).

Nationwide said house prices in January increased by 0.7 per cent from the month before after being flat in December, beating economists’ forecast in a Reuters poll for a 0.1 per cent rise.

“There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down. This follows a shift in view amongst investors around the future path of Bank Rate,” Nationwide chief economist Robert Gardner said.

Prices in January were 0.2 per cent lower than a year earlier – the smallest annual decline since January 2023 – after forecasts for a 0.9 per cent decline and a 1.8 per cent fall in December.

Looking at the three months to the end of January, prices rose by 1.1 per cent, their fastest since July 2022, shortly before rising Bank of England interest rates and temporary bond market turmoil under Prime Minister Liz Truss hit the market.

The Bank of England is expected to keep the bank rate at 5.25 per cent on Thursday, but may lower some of its inflation forecasts, which economists think will give it scope to start to cut interest rates from the middle of this year. REUTERS