Despite London ending the year below UK average for the first time in 8 years, UK annual house price growth ended 2016 at 4.5%, just as it had done in 2015, Nationwide reports.
According to Halifax, house prices in the three months to December were in fact 2.5% higher than the preceding quarter to September 2016 and 6.5% higher than the same three months of 2015.
Halifax also report that between November and December, house prices increased by 1.7%, the fourth successive monthly rise and the biggest since March 2016.
To summarise the year, Robert Gardner, Nationwide’s Chief Economist, stated:
The story of UK house price growth in 2016 was one of relative stability.”
“There were signs that London’s significant period of outperformance may be drawing to a close. For the first year since 2008, annual house price growth in the capital was lower than the UK average, with prices increasing by 3.7% over the year, down from 12.2% in 2015.”
Predictions for 2017
Commenting on Nationwide’s outlook for 2017, Gardner suggested that “house price prospects will depend crucially on developments in the wider economy, around which there is a greater degree of uncertainty than usual.
Martin Ellis, Halifax housing economist, said
Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017.”
Ellis went on saying that house prices in the UK 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.“