House prices dipped in January

LONDON Wed Feb 6, 2013 8:34am GMT

A woman walks past houses on a street in London March 13, 2012. REUTERS/Luke MacGregor

A woman walks past houses on a street in London March 13, 2012.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - House prices dipped on the month in January but posted their first annual rise in more than two years, helped by a Bank of England scheme aimed at boosting lending, mortgage lender Halifax said on Wednesday.

Halifax said prices dropped 0.2 percent last month in line with economists' forecasts in a Reuters poll and after a downwardly revised 1 percent gain in December.

However, prices in the three months to January were 1.3 percent higher than a year ago, slightly undershooting forecasts. That was the first such rise since October 2010.

"The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months," Halifax economist Martin Ellis said. "This is likely to have been a factor contributing to the pick-up in both home sales and prices."

But he added that sluggish economic growth and pressures on household finances were expected to constrain demand for housing in coming months.

"Overall, we expect continuing broad stability in house prices nationally in 2013," he said.

(Reporting by Olesya Dmitracova and Michael Holden)