Property prices across the UK jumped by their largest figures since March 2016 in the period between November and December 2016, despite the weaker post-Brexit market and continuing uncertainty over the direction of the economy.
According to data from Halifax, prices increased by 1.7% last month, up from 0.6% last in November. The three-month average of year-on-year house price growth was 6.5% last month, up from 6%.
Martin Ellis, Halifax housing economist, says the outlook for 2017 is notably more cautious: “House prices finished 2016 strongly. 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 per cent by the end of 2017.”
Other market experts were equally cautious. “The surge in house prices in December should not be read as a sign that the housing market is fizzing,” Samuel Tombs, an economist at Pantheon Macroeconomics told the Telegraph. He added that Halifax’s measure is volatile. This jump was far higher than the estimated consensus for monthly growth which was put at 0.3%.
While it appears there is momentum in the market, the underlying trend “remains significantly weaker than before the referendum,” said Mr Tombs. “House prices likely will track growth in households’ incomes much more closely this year.”
Meanwhile, a major online letting agent has recorded its highest ever figures for the first week in January, aided by the so-called ‘divorce day’ on Tuesday 3rd January.
Inquiries at Upad for the first week back in January were up 60% from the first weeks in December and 46% from November 2016.
James Davis, Chief Executive Officer and founder of Upad.co.uk, says, “We typically see a rise in new tenant inquiries in January, but this year the figures have broken all of our records.
“There are, of course, several reasons why prospective tenants could have been registering with us on the 3rd January, but our account managers have reported that many of the enquiries may have been the result of relationships breaking down over the festive period, so perhaps ‘Divorce Day’ isn’t such a myth after all!
“Most of our enquiries have been for short-term lets on studio apartments, as people decide what their next move will be, but where there are children involved, we have also seen requests for family-style townhouses, which are readily available to move into. We are bracing ourselves for a busy month ahead as we look to secure tenancies for all of these new enquiries.”