The housing market remained strong during January with prices increasing by 1.5 per cent, figures showed today.

Halifax, Britain's biggest mortgage lender, said historically low interest rates and low unemployment were continuing to drive the market.

The increase pushed the average cost of a property up to £123,451, and prices for the three months to the end of January are now 24.9 per cent higher than they were during the same period the previous year.

But the group said it still expected the market to slow, with prices rising by just nine per cent during 2003, compared with 26 per cent the previous year.

Martin Ellis, Halifax chief economist, said: "The factors that drove the market up last year continue to be very much in place.

"Mortgage rates are at their lowest level since the late 1950s. Unemployment too has continued to fall despite the relatively sluggish pace of overall economic activity."