Monthly dip bucks house price trend
House prices are 2.2% higher than they were a year ago, despite taking a dip in January, official figures have shown.
Prices fell by 0.7% month-on-month in January in the first drop seen since September, although at £234,000 on average prices are still 2.2% higher on an annual basis, the Office for National Statistics (ONS) said.
Experts said that the ONS figures, taken alongside some recent reports of a pick-up in activity and returning confidence to the market, suggest that house prices are likely to see a modest upswing over 2013.
However, the ONS figures also highlighted the continued patchy state of the market, with prices in London, which has enjoyed strong interest from wealthy overseas buyers, up by 5.5% year-on-year.
Meanwhile, prices fell by 5.4% annually in Northern Ireland, continuing a long-running trend of decreases seen since 2008. Across the UK, house prices were up by 2.4% in England and 0.9% in Wales year-on-year, but dipped by 0.2% in Scotland.
All regions in England recorded year-on-year house price growth, with the East and the North East also recording relatively strong rises, at 3% and 2.2% respectively. Despite recently topping a survey of places where Britons would most like to live, the South West saw the weakest annual price rise in England, with a 0.1% increase.
The findings also showed that prices paid by first-time buyers were 2% higher year-on-year at £175,000 typically, while those paid by existing home-owners increased at a faster annual rate of 2.2% to reach £269,000 on average.
The ONS figures were released as a survey from the Building Societies Association (BSA) found that Britons believe that mortgages are at their most accessible for at least five years.
Lenders have put a recent pick-up in the market down to government efforts to reinvigorate lending, such as the Funding for Lending scheme, which gives lenders access to cheap finance in order to help borrowers.
The number of mortgages on the market has increased by around one third since the scheme was introduced last August and lenders have been offering some of their lowest ever rates. The Council of Mortgage Lenders (CML) is calling for another scheme, called NewBuy, which was launched last spring and allows people to buy a new-build home with a 5% deposit, to be extended beyond 2015 in the forthcoming Budget.