Another factor coming into play that could push house prices upward has been announced by Nationwide. The building society warned that the lull in construction activity will lower the supply of houses in the market and that will lead to an increase in house prices. The average price was reported for January at £196,829.

December had shown an increase of 0.8%, while January prices were up 0.3%.

The coming months are expected to show strong demand for house purchases. Consumers continue to be optimistic and the strong labour market will reinforce that. When considering that interest rates are still very attractive and historically low, home buyers are sure to show up, especially in late winter or early spring.

Estate agencies have reported that the number of properties coming onto the market is low. Demand will be pushed upon an already low supply and house prices will surely rise.

Nationwide’s chief economist, Robert Gardner, commented, “The concern remains that construction activity will lag behind strengthening demand putting upward pressure on house prices and eventually reducing affordability."

The low supply of housing in the UK has been subject of much discussion by government and economists. The review of scenarios rarely involves a quick fix or a clear solution. Demand is expected to continue to be strong as year upon year more young people and families attempt to come onto the property ladder. Fewer have been able to become homeowners and some experts warn we could have generations of renters.

As more data is released concerning the housing market and house prices over the next few months, it will become clearer how hopeful home buyers will fare and how strong demand truly becomes.