THE housing market is performing better than expected, a leading property association said today.

Newly released figures show prices dropped by 0.6% in January.

But the National Association of Property Buyers said this “small dip” was to be expected, and there were reasons to be optimistic.

Spokesman Jonathan Rolande said: “A 0.6% alone is pretty insignificant and almost immeasurable given that the Winter period is traditionally quieter with January having fewer working days to view and process properties on the market.

“The concern for homeowners and those making a living from the sector is the report that this is now the fifth consecutive month of price drops and if this continues for just one or two more months, annual growth will be in negative territory which is something we have not seen for a long time.”

Outlining why there are reasons to be optimistic, Mr Rolande added: “But there is hope for those that were fearful of a rapid deterioration. Estate agents are reporting brisk business and there is a realisation by many buyers that higher lending rates are not a blip, and that this is the new normal. January has, for new sales, also been surprisingly positive. We should see the result of that activity in statistics by March or April.

“What’s vital is that we continue to see sensible leadership and sound economic policies. The botched budget from Liz Truss and Kwasi Kwarteng caused a huge amount of damage to the sector which we can’t afford to see repeated.”

Figures released by Nationwide today revealed how house prices fell again in January leaving them considerably lower than their August high as growth was stalled by a lack of cheap mortgage deals.

Figures show annual house price growth slowed to 1.1% from 2.8% in December as cheaper mortgages firmly became a thing of the past.

January saw a further monthly price fall (-0.6%), which left prices 3.2% lower than their August peak.