There was an unexpected pickup in annual price growth in January, which accelerated to 3.2% said Nationwide, up from 2.6% in December.

Prices rose by 0.6% in January, taking the average UK house price to £211,756.

Robert Gardner, Nationwide’s chief economist, admitted that the ‘acceleration in annual house price growth is a little surprising, given signs of softening in the household sector in recent months’.

He pointed to soft retail sales over the Christmas period, as the squeeze on household incomes continued to take its toll.

Gardner added: “Mortgage approvals declined to their weakest level for three years in December, at just 61,000. Activity around the year end can often be volatile, but the weak reading comes off the back of subdued activity in October and November.

“There are few signs of an imminent pickup, as surveyors report that new buyer enquiries have remained soft in recent months.”

Supply slowdown

House prices continue to be supported by a lack of supply and Nationwide said that the flow of properties coming onto estate agents’ books has been ‘more of trickle than a torrent for some time now’. The lender reckons that this lack of supply is likely to be the key factor providing support to house prices.

But some commentators think the house price boost is down to more than a shortage of property.

Sam Mitchell, CEO of online estate agents HouseSimple.com, said: “It would be short-sighted to simply say that house prices are rising because of, and only because of, a lack of supply.

“Across the UK, there are micro property markets seeing healthy price growth because houses are affordable and job prospects are good. Thriving regional business hubs are attracting skilled workers, many from London, because among other things, home ownership is a reality.

“The UK property market is no longer all about London, which is no bad thing, as the impact of a hard-Brexit is likely to hit the capital harder than anywhere else in the country.”