House price growth increased from 2.6% to 3.2% in January – a rise Nationwide dubbed ‘unexpected’.
The society’s house price index also saw prices jump up by 0.6% on a monthly basis for the second time in a row.
Robert Gardner, chief economist of Nationwide, said: “The acceleration in annual house price growth is a little surprising, given signs of softening in the household sector in recent months.
“Retail sales were relatively soft over the Christmas period, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”
He added: “Activity has been subdued on both the demand and supply side of the market.
“The flow of properties coming onto estate agents’ books has been more of trickle than a torrent for some time now and the lack of supply is likely to be the key factor providing support to house prices.”
But Paul Smith, chief executive of haart estate agents, reckons a lack of supply isn’t the main factor in house prices increasing.
He said: “We are a long way off from a ‘housing slump’, as prices continue to move upwards across the county.
“However this is not just down to a lack of stock, as they are suggesting.
“Our own data for January shows that the number of new buyers entering the market is up 11% and the number of first-time buyers is up 6%, but we have also seen our stock increase by 36% on the month in the New Year surge.
“Whilst London is still moving at a slower pace, regional areas such as Manchester, Liverpool and the East Midlands are more than making up for this.
“We need to get used to the re-calibrated picture of house price growth across the UK, and not get bogged down on the figures for the capital.”
In November the government cut stamp duty for first-time buyers.
Jeff Knight, director of marketing at Foundation Home Loans, said: “The cut to stamp duty for first-time buyers has certainly nudged up growth, but it remains to be seen whether this alone helps them to jump through the other affordability hoops.”
“Securing the finance to purchase a property can be challenging enough, even more so for those with previous blips on their record. “
Craig Hall, new build manager at Legal & General Mortgage Club, reckons the market is in a healthier position than we have seen in previous years.
He said: “House price growth is becoming more aligned with inflation and the recent exemption in stamp duty, is all welcome news for first-time buyers.
“However, anyone unsure about their options should get in touch with a mortgage broker.
“Brokers have access to thousands of mortgage products and can provide valuable advice and support, ensuring buyers get the most appropriate mortgage in accordance with their needs.”