Halifax points to homebuying lift

Would-be homebuyers are being persuaded back to the market despite a sluggish start to the new year, lender Halifax said.

Halifax's latest index showed a 0.2 per cent drop in average prices last month, at odds with a 0.5 per cent rise recorded by the Nationwide.

But the bank's less volatile quarterly measure showed prices growing 1.9 per cent since November, helped by the cheap billions on offer through the Bank of England's Funding for Lending scheme.

The housing economist Martin Ellis said it was more difficult than usual to pick trends, but added: "The market has clearly been a bit firmer in the last few months."

Prices, averaging £162,932 in January, are set for broad stagnation this year, according to the lender, which predicts anything from a 2 per cent fall to a 2 per cent rise in property costs.

The Bank's FLS scheme is crushing savers because banks awash with funds have little need to attract deposits.

Mortgage approvals for house purchases rose for a fifth month, running to an 11-month high of 55,785 in December.