The hometrack national January survey of the housing market shows that the market has begun the New Year fairly modestly, with marginal house price gains in most areas, averaging 0.1% across the country. Although this builds on a similar December's rise, which ended a seven month declining trend in price changes, it is well behind the required trend if the annual level of inflation is to stay at the 6% that has been widely predicted for this year.

Hometrack believe that the increase in the number of counties experiencing positive price changes is as an indicator of growing strength in the market. In January, 42 of the 57 counties in the survey experienced positive gains, compared to only 33 in December. Furthermore, in January, only two counties, Surrey and Greater Manchester experienced small falls in prices.

The counties with the highest gains were: North Yorkshire (0.5%), Cornwall (0.4%), and the East Riding of Yorkshire (0.4%). Seven other areas recorded gains of 0.3%. Of the two areas where prices fell, Surrey saw prices fall by 0.3%, and Greater Manchester slipped by 0.1%. Both these counties have seen exceptional gains over the last two years and these price falls are considered more a correction than an indication of a future trend.

Generally, counties with the highest rises are at the outer borders of England and Wales and away from the central and South East. This reflects better affordability of houses due to more moderate price increases over the last few years. The number of sales agreed in the month is 7.5% higher than 12 months ago, which again supplies evidence of a buoyant start to the year. Hometrack's data also shows that the house price achieved as a percentage of the asking price, averaged 94.75%, the same as last month, again ending a declining trend last year.

John Wriglesworth, hometrack's housing economist, commented: "This data really is encouraging for the property market across the country. It shows that consumers everywhere are getting on with their lives and not being held back by concerns about economic slowdown, or terrorism. We remain of the view that the market will continue to strengthen this year, and forecast an annual rise of 5% across the country, with a more even distribution of price rises between northern and southern areas than has been seen in recent times."

Large UK regions:

Demand trends:

Top 5 performing regions, contributing factors:

• North Yorkshire (+0.5%) : Benefiting from strong economy in Leeds as new road links make commuting possible
• Cornwall (+0.4%): Continuing to grow as migration from the South East and London pushes up prices
• East Riding of Yorkshire (+0.4%): Hull in particular is drawing investor interest as regeneration of town centre is encouraging new business
• Mid Wales (+0.3%): Price increases in Wales usually follow similar increases in surrounding regions. Growing retirement area.
• Devon (+0.3%): Slightly behind Cornwall but migration pushes prices up again

Worst performing regions, contributing factors:

• Surrey (-0.3%): Has long been one of the most popular and expensive home counties. With the economic slowdown affecting prices at the top of the market, it is not surprising that it is the only county in the country to show even a fractional decrease.
• Greater Manchester (-0.1%): Marginal change attributed to seasonal trend.

Price Change by County:

Price Change by City: