LONDON, Feb 7 Reuters British house prices were unchanged in January after falling in monthonmonth terms in each of the previous four months as borrowing costs rose, mortgage lender Halifax said on Tuesday.

The annual rate of house price growth slowed to 1.9, the weakest increase in three years, Halifax said.

Britain39;s housing market saw a surge in demand from buyers during the coronavirus pandemic but a sharp rise in interest rates over the past year and the squeeze on households39; budgets caused by high inflation has hit the momentum.

Kim Kinnaird, a director at Halifax Mortgages, said the trend of higher borrowing costs hitting demand was likely to continue in 2023.

For those looking to get on or up the housing ladder, confidence may improve beyond the near term, she said.

Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in homebuying affordability over time.

In London, where the housing market has underperformed those of other regions of the country, prices in January were unchanged from the same month last year after rising by nearly 3 in the 12 months to December, Halifax said.

Rival mortgage lender Nationwide said last week its measure of house prices dropped by a biggerthanexpected 0.6 in January and was 3.2 below its peak in August.

As well as the Bank of England39;s increases in interest rates since December 2021, there was a major disruption to the mortgage…