UK house prices grew by 2.7 per cent in the last three months of 2017, compared with the same period a year earlier, according to the Halifax house price index, slowing from 3.9 per cent in November.
The figures revealed that house prices in the final quarter were 1.3 per cent higher than in the previous quarter (July-September), down from 2.3 per cent recorded in October and November
On a monthly basis, prices also fell by 0.6 per cent from November following a 0.3 per cent increase in both October and November, the first fall since June 2017.
Halifiax said the average house price at the end of the year was £225,021, 2.4 per cent higher than in January 2017.
"As we’d anticipated, the housing market in 2017 followed a similar pattern to the previous year. House price growth slowed, whilst building activity, completed sales and mortgage approvals for house purchase all remained flat. 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.
"However, 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 per cent at the end 2018."
Jeremy Duncombe, director of Legal & General's mortgage club, said: "Following last week’s Nationwide house price figures, today’s results show a similar end to 2017. Year-on-year house price growth is now far more in line with wage inflation and, coupled with low mortgage rates, sets the market on a strong footing for 2018.
"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. With thousands of mortgage products now available, anyone who is unsure of where to begin should get in touch with a mortgage broker for advice. The clarity and support that brokers provide will not only help buyers achieve their dream of home ownership much more easily, but will also ensure that they get the best deal possible."