Nationwide has reported that January saw annual house price growth slowing for the first time in six months.

It slowed to 6.4%, from 7.3% in December 2020.

The UK’s largest building society said this was likely down to the impending end of the stamp duty holiday.

Meanwhile, January prices were down 0.3% month-on-month.

Robert Gardner, Nationwide’s chief economist, said: “January saw the annual rate of house price growth slow modestly to 6.4%, from 7.3% in December. House prices fell by 0.3% month-on-month, after taking account of seasonal effects – the first monthly decline since June.

“To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase. While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage).

“The typical relationship between the housing market and broader economic trends has broken down over the past nine months. This is because many peoples’ housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.

“Indeed, the total number of mortgages approved for house purchases in 2020 actually exceeded the number approved in 2019, and house price growth ended 2020 at a six-year high, even though the economy was probably around 10% smaller than at the start of 2020, with the unemployment rate around a percentage point higher.

“Looking ahead, shifts in housing preferences are likely to continue to provide some support for the market. However, if the stamp duty holiday ends as scheduled, and labour market conditions continue to weaken as most analysts expect, housing market activity is likely to slow, perhaps sharply, in the coming months.”

David Westgate, group chief executive at Andrews Property Group, added: “The slight drop-off in prices during January is wholly understandable rather than a cause for serious concern.

“The end of the stamp duty holiday and the threat of rising unemployment will of course put some downward pressure on prices, but we do not expect activity levels to drop off sharply.

“There are many positives that could support values during 2021. As more and more people are vaccinated against Covid-19, they will want to get on with their lives, and buying and selling property will play a key role in that.

“Many households will have sat tight despite the stamp duty holiday and there is potential for a second wave of activity during 2021.

“The feel good factor as we hopefully emerge from the worst days of the pandemic could comfortably offset the very clear economic challenges the economy faces.”