House prices up 6.5% on last year

In the three months to December house prices rose by 6.5% year-on-year and were 2.5% higher than in the previous quarter, according to the latest index.

The Halifax House Price Index found that at 2.5%, the quarterly rate of change in house prices as recorded in December, was the highest seen since March 2016.

The annual rise of 6.5% in the three months to December was the second consecutive increase in the annual rate, following a low of 5.2% in October and 6.0% in November.

Despite the pick-up towards the end of the year, the annual rate of growth is still markedly below the 10% high recorded in March,

However, between November and December prices rose by 1.7%: the fourth monthly rise and the steepest since March 2016.

Martin Ellis, housing economist at Halifax, said:

“House prices finished 2016 strongly. Prices in the final quarter of the year were 2.5% higher than in the previous quarter. The annual rate of growth increased, rising for the second consecutive month, from 6.0% in November to 6.5%.

“Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017. UK house prices should, however, continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. Overall, annual house price growth nationally is most likely expected to slow to 1-4% by the end of 2017. The relatively wide range for the forecast reflects the higher than normal degree of uncertainty regarding the prospects for the UK economy this year.”

Keith Street, Vice Chairman, Group Lending at The Northview Group, said:

"These latest figures from the Halifax show that 2016 has been another strong year for house price growth. The housing market remains a highly competitive space, and brokers are increasingly busy helping thousands of customers to secure a mortgage for their first or next step on the property ladder."

 

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