The latest provisional figures from the Nationwide property index show that seasonally adjusted house prices increased by just 0.3% in January, the lowest monthly rise for eight months. The actual average house price fell slightly from £173,746 in December 2006 to £173,225 in January 2007.
Commenting on these figures, Nationwide's Chief Economist Fionnuala Earley said: "2007 started off with a surprise as the Bank of England raised interest rates for the third time in six months. Only time will tell how much this decision will affect the housing market, but even before January's rate rise there were already some early signs of cooling. House prices increased by just 0.3% in January, the smallest monthly rise since May last year, which pulled the annual rate of house price growth back into single digits. Prices increased at an annual rate of 9.3% in January, down from 10.5% last month. The price of a typical house now stands at £173,225. Estate agents reported some easing of demand in December and January, and new buyer enquiries recorded their first fall in 19 months. While the correlation with mortgage approvals is not perfect, it suggests that the 129,000 house purchase approvals recorded in November may have been the peak."
