UK house prices increased 0.3 per cent in January 2015 compared to December 2014, slightly faster than the previous month’s rise of 0.2 per cent, but annual growth slowed from 7.2 per cent to 6.8 per cent. This is the fifth month in a row in which annual growth has slowed.UK house prices are now an average of £188,446, says the lender, which bases its figures on mortgages approved during the month, slightly lower than the £188,559 recorded in December. On a seasonally adjusted basis, though, UK house prices are currently 2.4 per cent above their pre-crisis peak.Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: "The further moderation in the pace of price growth is unsurprising, given the slowdown in housing market activity in recent months. The number of mortgages approved for house purchase has been around 20% below the level prevailing at the start of 2014 and surveyors continue to report subdued levels of new buyer enquiries. "The reasons for the slowdown in activity remain unclear. Unemployment has continued to decline and wage growth has started to outstrip increases in the cost of living for the first time since the financial crisis. Surveys suggest that consumer confidence remains elevated – a view corroborated by healthy gains in retail sales over recent months. "Although house price growth continues to outpace income growth by a significant margin, affordability does not appear stretched at a national level. The cost of servicing a typical mortgage remains close to the long run average as a share oftake home pay, in part thanks to the ultra-low level of mortgage rates."Indeed, Gardner forecasts that activity will increase in the coming months, as the economic backdrop continues to improve, although uncertainty surrounding the general election and the ongoing shortgage of supply could still keep sentiment muted.

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