House prices rose for the seventh consecutive month in January - but there is concern about the medium-term viability of this upward trend.
New figures from the Halifax suggest that prices rose by 0.6 per cent in January when compared with December. The cost of the average home is now £169,777 - 3.6 per cent higher than in January 2009, and 9.9 per cent higher than during the nadir of the property market in April 2009.
But the rate of increase is slowing down. The average rise in prices over the previous six months was a full 0.5 per cent higher than that seen in January. The Halifax has predicted that there will be no overall change in property prices over the course of 2010.
There is also concern that the market could be hit by an influx of new buyers. As residential and buy-to-let mortgage lenders become less reticent about extending money, the number of new buyers has increased. It is thought that this trend will increase significantly over the next few months.
This could be very bad news for professional buy-to-let investors. Stock remains low, and a high rate of new buyers could result in a second property bubble. This would make it very difficult for many investors to extend their portfolios.
But a second bubble could also have a positive effect for landlords. Artificially inflated prices are likely to push many buyers out of the market, increasing rental demand.
