"The latest UK house price index shows house price growth has continued to slow, but prices are yet to start falling."
The average UK house price was £274,000 in January, which is £24,000 higher than this time last year.
Average house prices increased over the year by 9.4% in England, 13.9% in Wales, 10.8% in Scotland, and 7.9% in Northern Ireland.
The East Midlands was the region with the highest annual house price growth, with average prices increasing by 11.6% over the year, up from 10.4% in December 2021.
The lowest annual house price growth was in London, where average prices increased by 2.2% over the year, down from 5.1% in December.
Despite being the region with the lowest annual growth, London's average house prices remain the most expensive of any region in the UK, with an average price of £510,000.
On a seasonally adjusted basis, average house prices in the UK increased by 0.7% between December and January, following an increase of 0.6% in the previous month.
Emma Cox, managing director of real estate at Shawbrook, said: “House prices continue to challenge any sense of normality despite rising inflation and the soaring cost of living forcing a reality check to buyers’ budgets. Record prices and undiminished demand is putting the pressure on buyers that aren’t seeing their money go as far across the board.
“Yet, the outlook does remain positive for those looking to sell. The market remains firmly in favour of those with capital available and looking to add to portfolios or let out properties. Although, recent hikes in energy bills and running costs will have to be factored in, socially responsible landlords will be aware of the changes they can make to their portfolios in order to limit the impact of energy price rises in the future for tenants.
“The market is in desperate need of a steady stream of high quality, affordable, housing to rebalance the market and help those struggling to purchase a property. This will help to steady house prices that currently see the sky as the limit. It is important that the government continues to focus on delivering its Levelling Up Agenda. This will benefit our local communities, making the path to homeownership possible and improving living standards. By restoring a sense of community and spreading opportunities in the regions, this will create more demand for rental properties from landlords across the board.”
Karen Noye, mortgage expert at Quilter, commented: “The latest UK house price index shows house price growth has continued to slow, but prices are yet to start falling. On a seasonally adjusted basis, the average UK house price increased by 0.7% between December and January and was up 9.6% over the year to January 2022. The average house price reached £274,000 in January, £24,000 higher than the same time last year.
“Despite the slight uptick in month-on-month house prices, it still seems inevitable that a slowdown and subsequent fall in house prices is on the horizon given the current fiscal pressures we are facing.
“This morning’s CPI data showed inflation now sits at an eyewatering 6.2%. Last week the Bank of England hiked interest rates to 0.75% in an attempt to combat the soaring figure, and the knock-on effect will be costly for prospective homebuyers and those looking to remortgage.
“Many people are already feeling the squeeze financially due to soaring inflation and the rising cost of living, leaving many feeling less financially stable than they were before. Lenders are quick to pass on any rate rise to customers, so the increased costs will likely put off prospective buyers and buying a new home or taking the first step onto the property ladder will be pushed out of reach for many. As a result, we could see house prices dip over the coming months.
“What’s more, the Chancellor is due to present his Spring Statement later today and will be announcing measures the government will take to tackle the ongoing cost-of-living crisis. There is a clear need for the government to act to help save many from slipping into financial difficulty, but if the measures are not robust enough to alleviate the financial pressures many are currently facing, we could see a fall in the number of people looking to buy a new home which could ultimately cause a slowdown in house prices.”
