The latest Nationwide house price index has revealed that the average house price in the UK increased by 0.2% in January.

While prices are likely to continue rising, a slowdown in growth has already been observed.

Annual house price growth decreased from 4.5% in December 2016 to 4.3% in January 2017, and is now at its lowest level in 14 months (November 2015).

Robert Gardner, chief economist at Nationwide, believes that the current outlook for the housing market appears clouded, reflecting the uncertainty surrounding economic prospects.

“On the one hand, there are grounds for optimism.

“The economy has remained far stronger than expected in the wake of the Brexit vote.”

Data revealed that there was no economic slowdown in 2016 and the unemployment rate remained at an 11-year low in the three months to November.

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“However, there are tentative signs that conditions may be about to soften.

“Employment growth has moderated, and while wage growth has edged up in recent months, in real terms (ie after adjusting for inflation), earnings growth has already slowed.

“With inflation set to rise further in the months ahead as a result of the weaker pound, real wages are likely to come under further pressure.

“Employment growth is also likely to continue to moderate, should the economy slow as most forecasters expect.

“On balance, we agree with the consensus view that the economy is likely to slow through 2017 as the squeeze on household budgets intensifies and heightened uncertainty weighs on business investment and hiring.

“Nevertheless, we continue to believe that a small rise in house prices of around 2% is more likely than a decline over the course of 2017, since low borrowing costs and the dearth of homes on the market will continue to support prices.