UK house prices fall to lowest level since April 2020 in January

UK house prices dipped in January, suggesting that the recent property market boom may be slowing down.

Average UK house prices recorded their steepest month-on-month drop since the first Covid-19 lockdown back in April 2020 in January, down 0.3% last month to £251,968, according to the Halifax house price index.

However, while the fall took the average property value down to its lowest level since October 2020, prices were still up 5.4% year-on-year.

Halifax managing director Russell Galley said: "There are some early signs that the upturn in the housing market could be running out of steam, with the annual rate of house price inflation cooling to its lowest level since August."

Galley also noted that while stamp duty holidays haf "undoubtedly helped" to fuel growing demand for larger properties, given the current time to completion across the market, transactions in the early part of 2021 were unlikely include many borrowers who expected to benefit from the reprieve.

He added: "How far and how deep any slowdown proves to be is a challenge to predict given the prevailing uncertainty created by the pandemic.

"With swathes of the economy still shuttered, and joblessness continuing to edge higher, on the surface this points to slower market activity and downward price pressures in the near-term."