Feb 5, 2009

British house prices rise in Jan

British house prices rise unexpectedly in January

LONDON - BRITISH house prices rose unexpectedly in January for the first time in nearly a year amid signs that the property market may be beginning to stabilise, the country's biggest mortgage lender said on Thursday.

Halifax said house prices increased 1.9 per cent in January from the previous month. That offset December's 1.6 per cent decline and is the first monthly rise in house prices since February 2008's modest 0.1 per cent increase.

The monthly increase was unexpected, with most analysts predicting a decline of around 1 per cent.

Halifax's findings for January also stand at odds with other surveys into the housing market. Last week, the Nationwide building society said house prices fell a monthly 1.3 per cent in January.

Though Halifax, which is now part of the Lloyds Banking Group, stressed it is important not to place too much weight on one month's figures, it did say that there were some 'very early' signs that market activity may be stabilising, albeit at a low level.

'Nonetheless, continuing pressure 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,' said Mr Martin Ellis, Halifax's housing economist.

Mr Ellis also noted that during the last British housing crash in the early 1990s, house prices increased for several months during the period.

Despite January's increase, Halifax said the annual fall - measured by the average for the latest three months against the same period a year earlier - swelled to 17.2 per cent in January from 16.2 per cent the month before. -- AP