UK house prices get unexpected December boost but market remains subdued

James Warrington
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House Prices Are Stagnant In London
Prices rose by 2.2 per cent in December, according to Halifax figures (Source: Getty)

UK house prices rose 1.3 per cent in the three months to December compared to the same period last year, according to new figures from Halifax.

The annual growth rate was up from the 0.3 per cent recorded in November, but house prices were 0.4 per cent lower than in the preceding three months.

Read more: What experts predict will happen to UK house prices in 2019

Prices rose by 2.2 per cent in December following a 1.2 per cent fall the previous month, according to Halifax figures. This differs from the 0.7 per cent December drop recorded by Nationwide.

But analysts warned that overall the UK housing market remains subdued in the run-up to Brexit.

Figures released last week by the Bank of England (BoE) showed mortgage approvals fell to a seven-month low in November.

Russell Galley, Halifax managing director, said: “In 2019, we’re expecting continued stability in house prices with between two per cent and four per cent price inflation.

“This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast.”

The increase takes the average UK house price to £229,729.

But the November Royal Institution of Chartered Surveyors (Rics) UK Residential Market Survey showed a decline in demand for housing and a drop in the number of sales.

Former Rics residential chairman Jeremy Leaf said Halifax's jump in sales is a result of a housing shortage more than anything else.

He said: "At first glance, the Halifax numbers are really positive as they reflect a time of particular political uncertainty and the height of Brexit turmoil.

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“But when taken with the recent fall in transactions it is clear that the increase has more to do with a shortage of stock rather than a bounce back in the market generally.”

Howard Archer, chief economic adviser to the EY Item Club, warned that house price measures can be volatile and differ between sources.

“It is therefore best not to attach too much importance to one particular survey but to try and take an overview,” he said.