The property market started the year on the back foot with annual house price growth slowing for the fifth month in a row.

The average cost of a home increased by 6.8 per cent in the year to the end of January, according to Nationwide Building Society.

The gain was the smallest annual rise since November 2013 and was down from year-on-year growth of 7.2 per cent in December.

Robert Gardner, Nationwide’s chief economist, said: “The further moderation in the pace of price growth is unsurprising, given the slowdown in housing market activity in recent months.

“The number of mortgages approved for house purchase has been around 20 per cent below the level prevailing at the start of 2014 and surveyors continue to report subdued levels of new buyer enquiries.”

But he said that the reasons for the slowdown in activity were less clear, as unemployment was falling and wage growth had started to outstrip inflation for the first time since the financial crisis.
He added that although the rate at which house prices are rising was continuing to outpace income growth by a significant margin, affordability at a national level did not appear to be stretched.
The cost of servicing a typical mortgage also remains close to the long-run average as a share of take-home pay.

Despite the slowdown, prices still rose by 0.3 per cent in January, to stand at an average of £188,446 – 2.4 per cent higher than their pre-crisis peak.

Going forward, Nationwide expects the housing market to regain momentum in the coming months as the economy continues to improve.