The average cost of a home in the UK went up by more than £5,000 over the course of 2017, according to figures released today.
The latest house price data from Halifax shows an increase of £5,280 (2.4 per cent) took the average property price to £225,021 by the end of the year.
However, the rate of price growth slowed in December as economic uncertainty and stagnant wage growth continued to make buyers more cautious.
Prices experienced their first monthly fall since June 2017, dropping 0.6 per cent in December, following a 0.3 per cent increase in both October and November.
“As we’d anticipated, the housing market in 2017 followed a similar pattern to the previous year,” said Russell Galley, managing director, Halifax Community Bank.
“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.”
However, he added that this year house prices 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.
House prices were 2.7 per cent higher in the three months to December when compared to the same period the year before, which is a marked slowdown from the 3.9 per cent growth recorded in November. However, this still represents a higher rate of annual growth than during the summer months, which recorded the lowest rate of house price growth in more than four years.
Overall, Halifax expects annual price growth to continue in the range of 0-3% at the end of 2018.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Unlike the official, transaction-based data, Halifax’s index is based on its mortgage offers, so it already will have captured the impact of the rise in borrowing costs.
“Looking ahead, the recent further decline in new buyer interest reported by RICS and NAEA, as well as the drop in consumer confidence, indicates that upward pressure on prices will remain modest.
“Furthermore, we remain concerned that new mortgage rates will rise further from the end of February, when new lending by banks no longer will generate borrowing allowances from the Term Funding Scheme.”
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