(RTTNews) - UK house prices increased unexpectedly in January after falling for eleven straight months, the Halifax said Thursday.

House prices rose 1.9% on a monthly basis in January, reversing December’s 1.6% fall. The Halifax said not to place too much weight on any one months’ figure. Prices in the three months to January compared to the previous three months, a better indicator of the underlying trend dropped 5.1%.

Annual rate of change in house prices, as measured by the average for the latest three months against the same period a year earlier was down 17.2%, the Halifax stated. The average house price was GBP 163,966 in January.

The number of mortgages approved to finance house purchases rose 15% in December. But approvals remained at a low level when compared to last year. According to the house price to average earnings ratio, housing affordability improved in December. Average earnings ratio fell to an estimated 4.48 in December 2008 from a peak of 5.84 in July 2007.

Recent reductions in Bank rate lowered regular monthly mortgage payments for the approximately 50% of all mortgage borrowers who have tracker and variable rate products.

Martin Ellis, housing economist at HBOS said “There are some very early signs that market activity may be stabilizing, albeit at quite a low level. Nonetheless, continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to mean that 2009 will be a difficult year for the housing market.”

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Posted in Categories: Economy, Releases, Stocks, UK.

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