Annual house price growth fell to 2.7% in December
House price growth fell for the first time in six months in December to end the year on +2.7%, after falling -0.6% on a monthly basis, according to the Halifax House Price Index.
The average price of a home at the end of 2017 was £225,021.
Russell Galley, managing director, Halifax, part of Lloyds Banking Group, said the annual rate of growth moderated to 2.7% from November’s 3.9%.
“As we’d anticipated, the housing market in 2017 followed a similar pattern to the previous year. House price growth slowed, whilst building activity, completed sales and mortgage approvals for house purchase all remained flat. This has been driven by a squeeze on real wage growth and continuing uncertainty over the economy,” said Galley.
“However, nationally house prices in 2018 are likely to be supported by the ongoing shortage of properties for sale, low levels of housebuilding, high employment and a continuation of low interest rates making mortgage servicing affordable in relative terms. Overall we expect annual price growth to continue in the range of 0-3% at the end 2018.”
Last week, Nationwide reported UK house prices ended the year at +2.6% higher than they started the year, significantly down on the 4.5% recorded by the lender in 2016.
Jonathan Hopper, managing director of Garrington Property Finders, said: “But despite the slowdown in price rises, Britain’s property market is far from seizing up. More than 100,000 homes were sold in every month of 2017, and many parts of the UK ended the year with a spring in their step – with brisk demand firing respectable, if not stellar, price growth.”
“Yet it’s a different story in parts of London, where a flight of equity is sucking the momentum out of price rises.
“On the front line we’re seeing a split between domestic buyers who are increasingly looking beyond the capital for better value elsewhere, and astute international investors who are capitalising on softening prices and the weak pound to buy in some of the most prestigious postcodes,” he added.