UK house prices rose at their highest rate in 18 months during January, the country's largest building society said today. In its monthly survey of the sector, the Nationwide said house prices, on a seasonally-adjusted basis, rose by 1.4 pct in January from the previous month, up from December's 0.5 pct rise. That was the biggest increase since July 2004 and well ahead of analysts' expectations of a more modest 0.5 pct rise. "This is a significant increase in price and confirms the strengthening trend we have seen since October," said Fionnuala Earley, Nationwide's group economist. On an annual basis, house prices were up 4.4 pct, higher than December's 3.0 pct increase and analysts' forecasts of a modest 3.3 pct rise. The average house price now stands at 158,478 stg, compared with 151,757 stg at this time last year. Nationwide said part of the pick up in the market since October reflects a release of some pent-up demand following the cut in interest rates in August, and the increased confidence on the part of buyers and sellers as they became more comfortable that the market was heading for a soft landing. However, it doubts that the pick-up over the last four months will persist partly because the coming year is expected to see below-trend growth and further rises in unemployment. In addition, it noted that affordability remains stretched and consumers appears to be becoming more reluctant to increase their unsecured debt levels. "The fundamentals of the market remain fairly fragile and will prevent strong price rises in 2006," said Earley.