U.K. house price growth slowed more-than-expected in January and mortgage approvals declined to a seven-month low at the end of last year.

House prices rose only 0.3 percent from December, when they grew 0.8 percent, data from the Nationwide Building Society showed Wednesday.

Economists had forecast a 0.6 percent climb in prices. The latest increase was the seventh consecutive rise in house prices.

On a yearly basis, house prices advanced 4.4 percent in January, slightly slower than a 4.5 percent rise in December and below the expected growth of 4.6 percent.

“As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level,” Robert Gardner, Nationwide’s chief economist, said.

IHS Global Insight Economist Howard Archer said house prices are likely to see solid increases over the coming months amid healthy buyer interest and a shortage of properties.

According to Nationwide’s Gardner, demand for homes is likely to strengthen in the months ahead as interest rates are set to stay on hold for longer than anticipated and regular wages continue to rise at a healthy pace.

The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.

Another report from the British Bankers’ Association showed Wednesday that mortgage approvals declined unexpectedly to a 7-month low in December.

The number of mortgages approved in December fell to 43,975 from 44,533 in November. It was the lowest since May, when it totaled 42,945. It was forecast to rise to 45,500.

Gross mortgage borrowing of GBP 12.4 billion in December was 24 percent higher than a year ago and overall new borrowing in 2015 was some 6 percent higher than the previous year.

BBA noted that larger companies continue to make use of capital market finance as an alternative to loan and overdraft borrowing from banks. Also net credit card borrowing of individuals decreased in December reflecting weak retail sales.

The material has been provided by InstaForex Company – www.instaforex.com