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Official: UK average house prices rose 7.2% last year

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The shortage in supply has helped to sustain house prices, but will it last?
Official: UK average house prices rose 7.2% last year

House prices across the UK increased by 7.2%, according to the official government house price index from the Office for National Statistics.

It noted that average property prices rose 1.4% in December, 1.1 percentage points higher than November, taking the typical UK property price to £219,544.

However this pace of change is still lower than the level of annual growth seen in the first half of last year.

Rob Weaver, director of investments at property crowdfunding platform Property Partner, said: “The housing market may have plateaued during last summer but for the final two months of 2016, prices regained momentum.

“With December, in particular, seeing a higher than expected rise in annual prices, property demonstrated itself to be a robust investment once again in 2016.

“At the risk of sounding like a broken record, the critical shortage in supply alongside ultra-cheap borrowing rates are supporting house prices and that looks set to continue.”

Slow and steady

Jonathan Hopper, managing director of Garrington Property Finders, noted: “While December’s 7.2% growth rate was higher than it was a year before, all the indications are that prices will now ease back into a pattern of slow but steady growth.

“On the front line, activity has been brisk in the early weeks of 2017. With stock levels still hovering at record lows, competition among buyers in many areas is rising – and the chronic imbalance between demand and supply is slowly driving up prices.

“Meanwhile at the top end of the market – and in pockets of London – it’s a different story. Buyers here now enjoy the upper hand, and are increasingly able to push for and get discounts.”

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