UK house prices took an unexpected dip in January, according to the latest data from lender Halifax, though the longer-term trend is still for persistent gains.

Prices fell by 0.9 per cent in January, Halifax said, against economists’ expectations for a flat reading, and well down from a gain of 1.6 per cent in the previous month. The result comes amid other signs of a slowdown in the crucial retail sector.

In the three months to January, compared to the same spell a year before, house price growth eased to 5.7 per cent from 6.5 per cent, again below forecasts from economists polled by Bloomberg. That is well below the peak of 10 per cent growth by this measure recorded almost a year ago.

Halifax housing economist Martin Ellis said in a statement:

The quarterly and annual rates of house price growth remain robust even though they are lower than in spring 2016. UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. These factors are unlikely to change materially during 2017.

Nonetheless, weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in some downward pressure on annual house price growth during the year.

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