UK house prices rose by 2.6% in 2017
UK house prices ended 2017 2.6% higher than they started the year, according to Nationwide, significantly down on the 4.5% recorded by the lender in 2016.
This put the average property price across the UK at £211,156.
Every region bar London saw prices rise over the year. The capital was the weakest performing region in 2017, with house prices down 0.5% year-on-year – the first time they have fallen for eight years.
Robert Gardner, Nationwide’s chief economist, said: “Low mortgage rates and healthy employment growth continued to support demand in 2017, while supply constraints provided support for house prices.
“However, this was offset by mounting pressure on household incomes, which exerted an increasing drag on consumer confidence as the year progressed.”
The lender pointed to a stark regional divide as price growth slowed in the South.
All regions except London saw house price gains in 2017. The West Midlands topped the table for the first time ever, with average prices up 5.2% year-on-year.
East Anglia, last year’s top performing region, saw the biggest slowdown in annual house price growth, from 10.1% in 2016 to 2.3% in 2017.
Wales saw a slight pick-up in the rate of growth compared to last year, with a 3.3% annual increase in 2017. Scotland’s house price growth was similar to last year at 2.6%. Northern Ireland saw a slight increase in annual house price growth from 0.7% in 2016 to 2.0%.
Gardner said: “The significant disparity in house prices across the UK has been a recurring theme in recent years. In this respect, 2017 saw the beginnings of a shift, as rates of house price growth in the south of England moderated towards those prevailing in the rest of the country.”
Jonathan Samuels, CEO of property lender, Octane Capital, added: “Not so long ago it would have been inconceivable for London to have been the only region not to have delivered positive returns in a calendar year.
“London, without doubt, has been a victim of its own success. Prices reached absurd highs and it is now paying for its irrational exuberance.”
Nationwide said that the performance of the housing market this year will be determined in large part by developments in the wider economy. Brexit developments will remain important, though these remain hard to foresee.
The lender predicted modest house price growth in 2019 of 1% to 1.5%.