LONDON, Jan 31 (Reuters) - British house prices lost some of their momentum in January when they rose by just 0.1% compared with December, but the market remains resilient in face of financial strains on buyers, mortgage lender Nationwide said on Friday.

A Reuters poll of economists had pointed to a 0.3% month-on-month increase after a 0.7% jump in December and an even bigger 1.2% leap in November.

"The housing market continues to show resilience despite ongoing affordability pressures," Robert Gardner, chief economist at Nationwide, said. "While there has been a modest improvement over the last year, affordability remains stretched by historic standards."

A prospective buyer with an average income and buying a typical first-time property with a 20% deposit would face a monthly mortgage payment equivalent to 36% of take-home pay – well above the long-run average of 30%, he said.

In another sign of how high prices have become, around 40% of first-time buyers had some help to raise a deposit, either in the form of a gift or loan from family or friends, or through an inheritance, Gardner said.

House prices in January were 4.1% higher than in the same month last year, slowing from a 4.7% annual increase in December, Nationwide said.

Several measures of Britain's housing market have suggested a strengthening of demand recently.

Data published on Thursday by the Bank of England showed net mortgage lending volumes rose in December by the most in more than two years.

The expiry at the end of March this year of temporary tax incentives for buyers of less expensive homes and for first-time buyers is likely to bring forward some demand in the property market, analysts have said.

Rising wages and the prospect of interest rate cuts by the BoE in 2025 - with a first reduction of the year expected next week - are also encouraging buyers.

Nationwide has previously estimated that UK average house prices are likely to rise this year by between 2% and 4%.

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https://www.reuters.com/world/uk/uk-house-prices-edged-up-by-01-january-nationwide-says-2025-01-31/