Sharp plunge in United Kingdom house price growth in 2017, says Halifax

Sharp plunge in United Kingdom house price growth in 2017, says Halifax

Sharp plunge in United Kingdom house price growth in 2017, says Halifax

Prices in the last three months of 2017 were 2.7 per cent higher than in the same three-month period of 2016.

Figures for December itself showed house prices had fallen 0.6 per cent, the first monthly decline the index has shown in six months.

According to the leading mortgage lender Halifax, UK house prices grew much more slowly in 2017 than in the previous year. The Reuters poll of economists had pointed to a 3.3 percent rise.

The Halifax data sets average house prices at £225,021 at the end of the year and is 2.4% higher than in January 2017 (£219,741).

House prices slipped by 0.6 percent month-on-month after a 0.3 percent rise in November, Halifax said.

He said: "House price inflation looks likely to hold steady in the short-term, which will give first-time buyers a greater chance of stepping onto the property ladder".

But the headline numbers mask a divided picture, where the previously red hot London and South East markets have dramatically slowed down and even started to see prices fall, while regional cities are seeing more robust price growth. "This has been driven by a squeeze on real wage growth and continuing uncertainty over the economy", said Russell Galley, managing director at Halifax Community Bank. Furthermore, we remain concerned that new mortgage rates will rise further from the end of February, when new lending by banks no longer will generate borrowing allowances from the Term Funding Scheme.

Halifax also said that new buyer enquiries stabilised a little after a sharp decline in autumn, while new instructions from buyers continued to worsen, marking the 22nd month of consecutive falls.

Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors and now an estate agent, said that this was confirmation of a "slowing rather than collapsing market".

Many forecasters are expecting the market to slow further, pencilling in United Kingdom price growth of about 1% this year, which would mean property values falling in real terms (when adjusted for inflation).

'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.

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