VITY jumped in the housing market in January as first-time buyers rushed to beat the end of the stamp duty holiday this month, but house prices fell in January according to government data.
Figures from the Council of Mortgage Lenders (CML) showed a 23 per cent rise in lending to first-time buyers compared with January 2011.
However, higher levels of activity did not boost prices, according to the Department for Communities and Local Government (DCLG), whose seasonally adjusted prices index showed a fall of 0.7 per cent in the month, to an average of £206,523.
Furthermore, data from the Financial Services Authority shows that outstanding mortgage debt barely changed in the final quarter of 2011, up just 0.1 per cent on the quarter to £1,218bn.
“The DCLG data reinforce our view that house prices will drift downwards the coming months in the face of relatively low consumer confidence,” said economist Howard Archer from IHS Global Insight. “Despite a recent limited pick up, housing market activity is still low compared to long-term norms.”