House prices in January rose by 1.9 per cent according to the Halifax house price index released today.

The Halifax also said housing market activity may be stabilising and interest rate cuts have helped to reduce mortgage payments and improve affordability.

However, house prices in general are still falling, and the Halifax warns not to attribute too much weight to the rise, as house prices in general will rise and fall on a month by month basis.

Although January’s rise reversed December’s 1.6 per cent fall, prices in the three months to January compared to the previous three months were 5.1 per cent lower.

Annually, house prices in January were 17.2 per cent lower than 2008.

Martin Ellis, housing economist at Halifax, said: “It is always important not to place too much weight on any one month’s figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn.

“For example, prices fell for seven successive months in 1989 but subsequently increased in three of the first ten months in 1990 even though the overall trend in prices was downwards.

“There are some very early signs that market activity may be stabilising, albeit at quite a low level.”

He added: “Nonetheless, continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to mean that 2009 will be a difficult year for the housing market.”

The Halifax data compare to figures from Nationwide showing a 1.3 per cent fall in house prices in January.

The number of industry-wide mortgages approved to finance house purchase increased by 15 per cent in December, to a seasonally adjusted 31,000 from a record low of 27,000 in November.

Approvals were still at a considerably low level, at 58 per cent lower than in December 2007.