House prices rose by 0.3% in January, according to Halifax, the lowest rate of growth since June 2021.

However, the increase still pushed average property prices to a new record high of £276,759, with the annual rate of growth now at 9.7%.

Russell Galley, managing director of Halifax, said: “Overall prices remain around £24,500 up on this time last year, and £37,500 higher than two years ago.

“Despite record levels of first-time buyers stepping onto the ladder last year, younger generations still face significant barriers to home ownership as deposit requirements remain challenging.”

Sundeep Patel, director of sales at lender, Together, added: “House prices grew exponentially in 2021, and still continued to rise in January, and we now find ourselves plunged into a cost-of-living crisis, while the market remains highly inflated with demand outstripping available properties. This could mean difficulties, particularly for first time buyers.

“And there’s more tough news for borrowers. Those with fixed rate mortgages will avoid the impact of the latest rise in interest rates but the same can’t be said for those with variable rates, who could face higher costs. The picture is still uncertain, but it’s likely we’ll see the market start to cool off as we head into spring as households juggle squeezed finances.”

Wales sees strong price rises

Wales is by far the strongest performing nation or region in the UK, with annual house price inflation of 13.9%.

Northern Ireland also continues to record strong price growth, with prices up 10.2% on last year, while house price growth in Scotland is 8.9%.

In England, the North West was the strongest performing region, up 12.0% year-on-year, and London the weakest, at 4.5%.