British house prices lost some momentum in January, rising just 0.1% compared with December, according to mortgage lender Nationwide. Despite ongoing affordability pressures, the market remains resilient, stated Nationwide's chief economist, Robert Gardner. Gardner highlighted that affordability continues to be strained, with mortgage payments accounting for 36% of take-home pay for an average buyer.

Around 40% of first-time buyers required financial assistance to raise a deposit, reflecting the high prices in the market. Nationwide reported a 4.1% year-on-year increase in house prices for January, a slowdown from December's 4.7% growth. Data from the Bank of England indicate a rise in mortgage lending volumes, signaling increased demand. Analysts predict a surge in market activity before the expiration in March of temporary tax incentives for homebuyers.

Factors such as rising wages and potential interest rate cuts by the Bank of England in 2025 are boosting buyer confidence, while Nationwide forecasts a 2% to 4% increase in UK average house prices for the year.