House prices up 0.5 per cent in January

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The Independent Online

The Bank of England's pump-priming of the mortgage market fuelled some cheer for homeowners as Nationwide said average prices rose 0.5 per cent in January.

The lender put the improvement down to the Bank's Funding for Lending scheme, but warned that further momentum would also depend on an improving economy.

Robert Gardner, its chief economist, said: "Progress is likely to be relatively slow on that front if recent trends are any guide, with the UK economy shrinking for the fourth time in five quarters."

Nationwide said conditions were improving gradually for first-time buyers, although they still account for just 20,000 transactions a month, compared with the pre-crisis average of 32,000 a month.

It also noted a trend towards borrowers lengthening the term of their mortgage, with 53 per cent over 25 years, up from 40 per cent in 2007.