House prices rise 9.5% year-on-year

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UK house prices in the fourth quarter of 2015 were 9.5 per cent higher than the same period in 2014, according to Halifax data.

Prices for October to December 2015 were 1.6 per cent higher than in the preceding three months.

The average UK house now costs £208,286.

Halifax housing economist Martin Ellis says that the three months ending December 2015 was the second successive quarter that house price growth was below 2 per cent.

This could herald a slight softening in the underlying rate of price growth, he adds.

“There remains, however, a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale,” he says.

“This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices.”

Dragonfly Property Finance managing director Mark Posniak says: “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.”

SPF Private Clients chief executive Mark Harris says that many lenders began January by lowering rates, including HSBC, Nationwide, Skipton and Virgin Money.

He adds: “While several lenders hiked their mortgage rates before Christmas, leading to fears that the cheapest deals are behind us, this was more to do with slowing down business over the festive period.

“The good news for borrowers is that lenders are likely to price aggressively in coming weeks in order to get off to a fast start.”