House prices jump amid robust demand and low supply

House prices in January grew at their fastest annual pace since June of last year amid "robust" demand and low supply, according to lender Nationwide.

The building society said prices rose by 11.2% year-on-year and by 0.8% between December and January.

However, the Nationwide predicted the market would slow this year as buying property becomes less affordable.

It added that with interest rates expected to rise in the coming months affordability would be further hit.

Nationwide's chief economist, Robert Gardner said housing demand had remained "robust".

"Mortgage approvals for house purchase have continued to run slightly above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax.

"Indeed, the total number of property transactions in 2021 was the highest since 2007 and around 25% higher than in 2019, before the pandemic struck.

"At the same time, the stock of homes on estate agents' books has remained extremely low, which is contributing to the continued robust pace of house price growth."