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The housing market has enjoyed a confident January, with prices up another 1.1% and brokers and estate agents reporting an "incredibly busy" start to the year.

The receding prospect of an imminent interest rate hike has helped to lighten the mood.

House prices have now risen 7.3% rise over the past 12 months to hit an average of £175,546, according to the latest Halifax house Price index.

That means the average property price jumped by £2,000 in January, and £13,000 over the year.

Activity is also rising, with housing transactions in 2013 exceeding one million for the first time since 2007.

House sales rose for the ninth successive month in December to 103,040, up 30% on December 2012, according to figures from HM Revenue & Customs.

Demand continues to outpace supply, as buoyant market conditions fail to increase the number of new instructions, said Martin Ellis, Halifax housing economist.

"Demand has increased against a background of low interest rates and higher consumer confidence, underpinned by signs that the economy is recovering and unemployment falling faster than expected.

"Official schemes, such as Help to Buy, also appear to have boosted housing demand.

"However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "The housing market has started 2014 where 2013 left off. Confidence among buyers is high with regards to their ability to get mortgage finance and their belief that house prices will continue to rise.

"Subsequently, estate agents and mortgage brokers have got off to an incredibly busy start as many buyers view this as the year when they will finally get on the housing ladder, or move up it.

"Falling unemployment has raised concerns that interest rates will rise sooner rather than later.

'However, there is no need to panic. We are still very much in recovery mode and it's unlikely that the Bank of England will risk raising interest rates too soon.

'Lenders are keen to have a strong first quarter and continue to offer some extremely attractive mortgage rates.

"With the Mortgage Market Review set to be introduced at the end of April, this will likely lead to a slowdown in lending as lenders get to grip with the changes.

"They are therefore trying to get ahead of the game so now is a good time to secure a competitive deal."

Jeremy Duncombe, director, Legal & General Mortgage Club, said London is still driving national house price growth figures, due to constricted supply and foreign buyers.

"However, in the North, prices have stayed at very similar levels over the past five years.

"Despite recent positivity it is still worth remembering that until transaction levels increase to where they were in 2007 the market will still be in the recovery phase.

"We are currently still well below that level."

Nicholas Ayre, managing director of homebuying agency Home Fusion, said buyers are "considerably more optimistic" than this time last year.

"Many are still concerned about an interest rate rise, but it is a tough call to tell when Bank of England governor Mark Carney will make his move.

"We have reached a point at which buyers are now thinking very hard about taking the plunge and this may now be starting to temper demand.

"The spectre of overpaying and the thought of negative equity could well be in the back of people's minds."

Ayre denied the property market was in a bubble. "The definition of a house price bubble is when people will pay anything for a property. This is not what we are seeing here.

"Growth at 1.9% over three months and annual price growth falling slightly when compared with the previous month, is hardly a market running away with itself."

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