The property market is showing further signs of stabilising, according to Nationwide. The mortgage lender reported subdued growth during January, with the price of the average property rising by 0.4%.

According to Nationwide?s latest figures, Prices have now been broadly stable for six months, increasing by just 0.25% per month over the period, compared with the previous six months? average monthly rise of 1.7%.

Activity has slowed sharply, as prospective buyers are waiting on the sideline until the outlook becomes certain, Nationwide?s Group Economist Alex Bannister said.

However with the market nearing the end of its usual seasonal lull, Mr Bannister believes sentiment may be about to turn more positive.

?Whilst increased confidence about the outlook will bring buyers back to the market, they will be more price conscious than in recent years. Higher activity levels and improving sentiment should help underpin current property valuations but they are unlikely to reignite rapid house price inflation,? said Mr Bannister.

Nationwide anticipates that the Monetary Policy Committee will increase interest rates later in the year by a quarter of a point to a peak of 5%. This is still low by historical standards, and therefore the lender expects the market to remain stable, with prices rising by 2% over the whole of 2005.