House price fall rate accelerates

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The average cost of a home in the UK rose by 0.2% during the month to stand at £195,724, according to the Department of Communities and Local Government.

But properties lost a record 11.5% of their value during the year to the end of January - the 15th month in a row that the annual rate of house price inflation has deteriorated.

The surprise increase in house prices was driven by a 4.9% jump in the average price of a detached property during January. However, this was offset by a 2.3% fall in the value of terraced houses and a 1.8% drop in the price of flats.

The cost of bungalows and semi-detached properties also eased by 0.9% and 0.4% respectively.

CLG also reported an easing in the quarterly rate at which house prices are falling, with properties losing 3.9% of their value during the three months to the end of January, compared with a drop of 5.2% in the three months to the end of October.

Halifax reported a surprise 1.9% jump in house prices during January, but this was more than wiped out by a 2.3% slide the following month.

The majority of data on the housing market since January has remained negative, as consumers continue to struggle to raise the finance they need to buy a home, while potential buyers also hold off in the hope of further house price falls.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The [CLG] data is not seasonally adjusted and house prices always tend to rise in January after falling over the Christmas period when activity is particularly muted.

"Significantly, this January's marginal edging up in house prices was substantially less than the 1.6% month-on-month rise seen in January 2008, hence the marked widening in the year-on-year drop."