House prices up 6.5% in Q4 2016, says Halifax

House prices in the three months to December were 6.5 per cent higher than in the same three months of 2015, according to the latest Halifax house price index.

Prices were up 2.5 per cent on the preceding quarter. The average house price is now £222,484.

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Halifax housing economist Martin Ellis says: “The annual rate of growth increased, rising for the second consecutive month, from 6 per cent in November to 6.5 per cent.

“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.”

Yorkshire Building Society chief economist Andrew McPhillips says: “Although house prices grew in 2016, we expect to see little movement in the average asking price over 2017 figures.

“House prices have considerably outpaced wage growth in recent years, limiting the number of people who can afford to buy a property. This, along with wider economic uncertainty, is likely to reduce demand for properties this year.”

The Northview Group group lending vice chairman Keith Street says: “Amidst this strong demand, it is important that brokers don’t shy away from the more complex cases that come with clients who are self-employed or working on a contractual basis.

“Whilst it can be easy to focus on the more straightforward cases, it is vital that borrowers who do not fit the traditional lending criteria also continue to receive the advice they need to understand which lenders will consider their particular circumstances.”