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Halifax reveals house price drop in December

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House prices fell by 0.6 per cent in December according to the latest Halifax House Price index, causing annual growth to drop to 2.7 per cent.

The average house price now stands at £225,021 according to the bank’s figures.

Prices increased by 2.7 per cent in the final three months of the year compared to the previous quarter.

Halifax Community Bank managing director Russell Galley says that 2017 had followed a similar pattern to the previous year.

He adds: “Nationally house prices in 2018 are likely to be supported by the ongoing shortage of properties for sale, low levels of housebuilding, 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 2018.”

The research notes that UK home sales have passed the 100,000 mark for eleven straight months, according to seasonally-adjusted figures from HMRC.

Approvals for mortgages for purchase remain flat though, seasonally adjusted data from the Bank of England suggests, having increased just 0.4 per cent month-on-month to 65,139.

Last month Halifax said that it expects “broad stability” in house prices this year. It pointed to inflation outstripping wage growth and uncertain economic prospects in the year ahead for the forecast subdued performance of the housing market.

Estate agent Jeremy Leaf says this is confirmation of a “slowing rather than collapsing market”.

“There is no doubt that prices are softening, particularly in London, but Halifax also confirms what we are seeing on the high street – that a lot of hard bargaining is going on and people are generally trying to get on with their moves,” he adds.

SPF Private Clients chief executive Mark Harris says that lenders remain keen to lend, with a number slashing the rates on their fixed deals recently.

He adds: “Affordability remains the issue but as long as buyers can get together a deposit, and many will call on the bank of Mum and Dad to do so, there continue to be plenty of attractive rates to tempt them.”

Garrington Property Finders managing director Jonathan Hopper says there are signs of a “renewed sense of purpose” among buyers already this year.

He adds: “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.”

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