UK house prices hit an all-time high in December after growth picked up pace for the second consecutive month, reports the Halifax house price index.
Based on the bank’s own lending figures, it now costs £222,484 to buy a typical property, a rise of 1.7 per cent.
Halifax’s three-monthly rolling figure, which it says is more accurate, also rose for the second month in succession and at 2.5 per cent, is at its highest level since last March, when the rate was 2.9 per cent.
On an annual basis, prices jumped 6.5 per cent, up from six per cent in November and a 2016 low of 5.2 per cent in October, says FTAdviser, although still well below the ten per cent peak reached in March.
Overall, property has continued to recovery following a sharp slump in activity in July and August in the immediate aftermath of the Brexit vote and amid an ongoing affordability squeeze.
Prices are being helped by a persistent shortage of houses for sale – the number of properties on estate agent’s books is hovering at a record low – and low interest rates.
Economists expect this year to see a continuation in the trend of fewer transactions and slower, but still positive average growth. London, however, could buck the trend and see prices fall on average.
Halifax predicts annual house price growth will drop to between one and four per cent by the end of 2017.
However, some expect the Brexit uncertainty to hit the economy harder when Article 50 is triggered, hitting average house prices across the country.
Nevertheless, others say the market could continue to show surprising resilience.
Alex Gosling, chief executive of online estate agents House Simple, said: “Considering the economic uncertainty the housing market faced in the second half of 2016 and how it responded, it wouldn’t be a major surprise if those predictions were knocked out of the ballpark.
“While mortgage rates remain low and assuming the labour market doesn’t being to falter, there’s no evidence to suggest the property market is about to hit a brick wall.”