House price growth slows in January, Nationwide data shows

UK house prices continues to rise steadily in January, but at a slower rate than had been forecast.

Data from Nationwide showed house prices rose 0.3% in January compared to the previous month, below the consensus estimate of a 0.6% increase.

Nationwide's year-on-year growth rate slipped down to 4.4%, from 4.5% in December, again below the consensus expectation of a 4.7% rise.

The building society noted that annual house price growth has remained in a fairly narrow range between 3% and 5% since the summer of 2015.

Chief economist Robert Gardner said continued growth was likely, with chances skewed towards a modest acceleration in house price growth.

"The labour market appears to have significant forward momentum. Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace," he said.

Nationwide's data has been weaker than the growth rates of all the other main measures of house prices over the last last six months.

Economist Sam Tombs at Pantheon Macroeconomics agreed that the modest rise in January was unlikely to be the start of a weaker trend.

"The combination of a strengthening labour market, banks’ increased willingness to lend and a dearth of homes for sale will continue to inflate house prices.

Howard Archer at IHS was also in accordance, predicting house prices are likely to see solid increases over the coming months.

"We expect house prices to rise by around 6% over 2016 amid healthy buyer interest - supported by largely decent fundamentals - and a shortage of properties. The main downside risk to this is if the economy sees a marked loss of momentum that undermines confidence and employment growth."