According to Nationwide, there was an increase in house prices in January compared to December.

January saw an unexpected increase in house prices, with short supply and low mortgage rates fuelling the annual growth of 3.2%, according to Nationwide, taking the average house price in the UK to £211,756. This compares with a figure of 2.6% the previous month.

Chief economist at Nationwide Robert Gardner described the uptick as “surprising”, given the squeeze on household incomes and low consumer confidence shown over the Christmas period.

He added: “Lack of supply is likely to be the key factor providing support for house prices. The flow of properties coming onto the estate agents’ books has been more of a trickle than a torrent for some time now.

“Mortgage approvals declined to their weakest level for three years in December, at just 61,000. Activity around the end of the year can often be volatile but the weak reading comes off the back of subdued activity in October and November.”

Nationwide said it expected low unemployment, low mortgage rates and a lack of supply to continue to support property prices over the year ahead, but with “low levels” of activity in the housing market.