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UK house prices defied predictions of a stalled start to the year by inching up 0.2 per cent in January, according to the latest figures from Nationwide.

January’s house price growth marked the second consecutive month of rises but moderated from the 0.8 per cent leap in December.

The average cost of a home rose 4.5 per cent in 2016 as a whole – matching the pace reported in 2015 despite the country’s Brexit vote.

Analysts had forecast monthly house growth to fall flat at 0 per cent last month.

On a year on year measure, prices are up 4.3 per cent compared to January 2015 – the lowest pace in 14 months.

Howard Archer, at IHS Global, thinks the pace of property price growth could fall to as low as 3 per cent this year with consumers feeling the pinch from higher inflation.

“The fundamentals for house buyers will progressively deteriorate during 2017 with consumers’ purchasing power weakening markedly and the labour market likely softening”, said Mr Archer.

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