HOUSE prices held firm during January but the annual rate of growth continued to fall, Britain's biggest mortgage lender said today.

Halifax said the average cost of a home in the UK was unchanged during the month at £197,244.

But annual house price inflation fell to 4.5 per cent for the year to the end of January, its lowest figure since November 2005 and down on the previous month's figure of 5.2 per cent.

The latest figures follow a 1.4 per cent rise in December.

Halifax said prices for the three months to the end of January were one per cent lower than in the previous quarter - the third consecutive fall on this basis.

But Martin Ellis, Halifax chief economist, said the figures offered "some reassurance" that the market was not heading for a long, sustained fall in prices.

He added that the group expects 2008 to be a difficult year for the housing market, and predicts house prices will end the year at the same level they started it.