You are here: Home - Mortgages - First Time Buyer - News -

Housing market finishes on 6.5% growth in 2016 but slowdown predicted

0
09/01/2017
House prices rose 6.5% year-on-year in the final three months of 2016, driving up the value of the average UK home to £222,484, Halifax research reveals.

It was the second consecutive month of annual house price rises after a dip in October, when prices grew by 5.2%, but still a way off the 10% annual rise seen in March.

Looking across all measures, house prices rose by 2.5% quarterly and by 1.7% monthly.

Despite house price growth finishing strongly in 2016, demand for property is expected to reduce this year as economic growth slows and employment levels and spending power are put under pressure.

Halifax’s housing economist Martin Ellis said economic uncertainty in 2017 would lead to a slowdown in annual house price growth to between 1 and 4% by the end of the year. Ellis added that the shortage of properties for sale, low levels of housebuilding and exceptionally low interest rates would continue to support prices.

Ben Madden, managing director of London estate agents Thorgills, said: “While annual house prices have failed to return to the lofty heights recorded during the pre-Stamp Duty rush of March, 6.5% growth at the tail-end of such a tumultuous year is far better than anyone would have expected.”

Luton saw the biggest rise in house prices in 2016. The average house price in the Bedfordshire town was 19% higher than the previous year, rising from £214,934 to £256,636. The easy commuting distance to London and relatively low property prices have helped to boost its popularity. The outer London borough of Barking and Dagenham experienced the second biggest rise in average house prices with growth of 18.6%. Dunstable, a neighbour of Luton, ranked third among the UK’s top performing towns and cities for property price rises.

Madden added: “London’s significance as a global hub for employment and business has continued to be a catalyst for house prices in satellite towns – as Luton and nearby Dunstable proved to be amongst the star performers for property price increases in 2016.”

Home sales in the three months from September to November were 9% lower than in the same period last year, according to transaction data from HMRC, but are expected to finish 2016 at broadly the same levels as 2015 and 2014 at £1.2m.

Mortgage approvals, however, ticked up again in between October and November with a slight rise of 0.2% after a 6% rise from September to October which is a good indication that home sales could increase over the coming months.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Given the Brexit uncertainty, you may be looking to protect your pounds ahead of your next holiday. Here are five w… https://t.co/pjn2d3P41E
  • If you are concerned you may miss the 31 January HMRC deadline to file your tax return, here are five excuses that… https://t.co/BRoNxdNLXM
  • Millions of Lloyds, Halifax and Bank of Scotland customers unable to make and receive payments in latest bank IT me… https://t.co/bKospYHViX
  • RT @YourMoneyUK: Millions of Lloyds, Halifax and Bank of Scotland customers unable to make and receive payments in latest bank IT meltdown…
  • RT @YourMoneyUK: Millions of Lloyds, Halifax and Bank of Scotland customers unable to make and receive payments in latest bank IT meltdown…
  • Make sure you're not paying more than you need to for your #energy. Check when your fixed deal ends and pop a note… https://t.co/OCfiU236o1

Read previous post:
inflation
Switch energy and insurance to bag ‘free’ gym pass or flight to Greece

Brits staying loyal to their energy and insurance providers are missing out on nearly £150 of savings each year, the...

Close