House prices reach record £212,000 average, says Halifax

Premiere of Justin and the Knights of Valour
Premiere of Justin and the Knights of Valour

House prices surged to a record high of more than £212,000 on average in January, Halifax has reported.

A 9.7% annual increase in the typical value of a UK home took the average price to £212,430.

Halifax said a mismatch between demand and supply, which has been putting a "significant" upward pressure on prices, looks set to persist in the coming months.

Property values increased by 1.7% month-on-month, following a 2% monthly increase in December.

Halifax said monthly price changes can often be volatile and quarterly changes are a more reliable indicator of underlying trends.

On a quarterly basis, prices between November and January were 2.2% higher than in the previous three months, up from a 1.6% quarterly increase in December.%VIRTUAL-ArticleSidebar-property-guide%

Martin Ellis, Halifax housing economist, said: "The imbalance between supply and demand continues to exert significant upward pressure on house prices.

"This situation looks set to persist over the coming months. Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease."

Halifax pointed to HM Revenue and Customs figures showing that home sales have picked up since last summer. Sales levels in the second half of 2015 were 6% higher compared with the same period a year earlier.

But recent reports from the Royal Institution of Chartered Surveyors (Rics) have shown that the stock of homes on the market has fallen to a new low.

TV property expert Sarah Beeny, owner of estate agent Tepilo, said the 9.7% annual rate of price growth is "unsustainable".

She said: "I think prices will level out somewhat in 2016, helping to stabilise the market."

Beeny continued: "One reason activity was slightly higher than usual in January, and the three months preceding it, could also be due to a last-minute dash by investors looking to buy property ahead of the stamp duty hike coming into force in April.

"In fact, this may provide heightened levels of sales activity right through until March, skewing data somewhat. We're then likely to see a slight slowdown in overall property sales from April due to less activity by investors."

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