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House price inflation slowed in January, the Halifax says

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The rate of house price inflation has fallen for the second month running, according to the UK's largest mortgage lender, the Halifax.

It said prices in the year to January rose by 7.3%, compared with a rate of 7.5% in December and 7.7% in November.

But its figures also show that average prices have risen above the £175,000 mark for the first time in five years.

In January, it said the average price of a home in the UK rose to £175,546, the highest since July 2008.

On a quarterly basis, the Halifax said prices were up by 1.9% in the three months to January.

The Halifax figures are in contrast to those provided by rival Nationwide, which has reported that house price inflation is continuing to accelerate.

It recorded an annual increase of 8.8% in January, and said average house prices had reached £176,491.

'Continuing pressures'

The Halifax also reported that housing activity continues to increase, with transactions in 2013 exceeding one million for the first time since 2007.

And it said the lack of new homes being built was helping to fuel price increases.

"With the supply of properties being slow to respond to more buoyant market conditions, stronger demand has resulted in continued upward pressure on house prices," said Martin Ellis, the Halifax's housing economist.

However he also said there were "continuing pressures on household finances", with wages still not keeping pace with inflation.

Earlier this week, the Institute for Fiscal Studies (IFS) said the country was not yet in a housing bubble.

It pointed out that when inflation was taken into account, house prices were still well below where they were in 2007.

It said national house prices in 2013 were 25% below their peak. Even in London they are still 17% below their previous record.

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