UK house prices up in January - Halifax

Rock-bottom interest rates continue to keep house prices aloft in some parts of the UK. The Halifax claims that house prices climbed 0.6% in soggy January overall, pushing the average house price to £160,907.

Property bulls however need to keep things in perspective. The underlying, longer-term picture isn't so positive. Are the January numbers a blip?

Consistency needed

Possibly. The Halifax says house prices slipped 0.9% in the three months up to January when compared with the previous three months. This three-month comparison is generally viewed as more reliable indicator of the underlying conditions. So all eyes will be on the figures for next quarter, and February's numbers.

The picture is further distorted by the range of different data out there. For example, Nationwide claims house prices fell 0.2% last month compared with the previous month. Nationwide and the Halifax can't both be right.

If you look at the Land Registry's House Price Index, the average house price fell -1.3% in the last year overall. In fact, in its end-of-year round-up in December, the Land Registry stated that the average price paid for a property in England and Wales in 2011 was £161,727 compared to £164,916 in 2010. That's very close to a 2% drop overall.

Glass half empty?

These are cast-iron figures based on sales over 12 months and are a more accurate reflection of the underlying state of the UK housing market.

Looking wider afield, the eurozone crisis still looms large, particularly regarding consumer confidence. Bear in mind that the UK economy contracted in the last quarter of 2011. The bottom line for most property owners in the UK is that, unless they own highly valuable pieces of real estate in central London, most people aren't seen any price rises. In fact, quite the opposite.

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