Steady 1.7% rise in house prices in December
Average UK house prices rose by 1.7% in December, according to Halifax, taking the average price to £208,286.
The lender said that quarterly price growth for October to December remained at 1.6%, indicating a slight softening. However, annual growth in house prices was robust at 9.5% higher than the same three months a year earlier.
Martin Ellis, Halifax housing economist, said: “There remains a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale. This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices.”
Rise in housing activity
Home sales are also up on a year ago, having risen 5.2% based on the three months to November, compared to the same period in 2014.
Plus the volume of mortgage approvals for house purchase increased by 1% between October and November, and 16% year on year, according to data from the Bank of England.
Crucially, supply has fallen to a record low, putting more upward pressure on house prices. New instructions by home sellers fell in November for the 10th successive month and the overall stock of homes available for sale fell to a new record low, said the Royal Institution of Chartered Surveyors.
Mark Posniak, managing director of Dragonfly Property Finance, noted: “With supply as weak as demand is strong, it’s same old, same old on the house price front.
“Looking into 2016, it’s hard to see anything other than a continuation of the current trend of steadily rising prices, especially with interest rate rises in the near future unlikely.
“The jobs market is strong, consumers are confident and mortgage rates remain very low. Against this backdrop, further price rises are almost inevitable.”