House price growth fell sharply in 2017 compared with the year before, according to new figures from Halifax.
The December Halifax House Price Index recorded an annual 2.7% rise in 2017, down from 6.5% in 2016.
Prices in December 2017 actually fell 0.6% as compared to November 2017, making it the first monthly decline since June last year.
Average prices were £225,021 at the end of 2017, up 2.4% on the start of the year in January.
The December figures are in line with Nationwide, which last week reported annual growth of 2.6% for December.
Russell Galley, managing director at Halifax Community Bank, said: “As we’d anticipated, the housing market in 2017 followed a similar pattern to the previous year.
“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, nationally house prices in 2018 are likely to be supported by the ongoing shortage of properties for sale, low levels of house building, high employment and a continuation of low interest rates making mortgage servicing affordable in relative terms.
“Overall we expect annual price growth to continue in the range of 0-3% at the end of 2018.”
Commenting on the index, Jonathan Hopper, managing director of Garrington Property Finders, said: “After ebbing and flowing throughout 2017, the annual rate of property price growth ended the year back at the modest level it hit during the chaotic weeks following the snap election.
“But despite the slowdown in price rises, Britain’s property market is far from seizing up. More than 100,000 homes were sold in every month of 2017, and many parts of the UK ended the year with a spring in their step – with brisk demand firing respectable, if not stellar, price growth.
“Yet it’s a different story in parts of London, where a flight of equity is sucking the momentum out of price rises. On the front line we’re seeing a split between domestic buyers who are increasingly looking beyond the capital for better value elsewhere, and astute international investors who are capitalising on softening prices and the weak pound to buy in some of the most prestigious postcodes.
“As we begin the new year, there are signs of a renewed sense of purpose among buyers, with those who have resolved to buy pressing ahead despite political and economic headwinds.
“As long as there are no unforeseen shocks – such as a change of government or the collapse of Brexit negotiations – we expect this gradual progress to continue.
“Nevertheless demand is accompanied by one overriding caveat – price sensitivity.
“With wages falling in real terms and rail commuters suffering inflation-busting ticket price rises, buyers face a balancing act when assessing value, and even the most determined are willing to walk away if the price isn’t right.”
Source: Property Industry Eye