House Prices Fall In December As Economic Uncertainty Dogs Market

The British housing market stalled at the end of 2017, with December showing the first monthly decline in six months as falling wages and Brexit fears weigh.

House prices fell 0.6% month on month in December, following a 0.3% increase in both October and November, according to Halifax.

This represents the first monthly fall since June 2017.

House prices were 2.7% higher in the three months to December, a marked slowdown from the 3.9% growth booked in November.

Russell Galley, managing director, Halifax Community Bank, said: “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.”

However, he added that this year house prices 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.

The average house price stood at £225,021 at the end of 2017.

Overall, Halifax expects annual price growth to continue in the range of 0-3% at the end of 2018.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Unlike the official, transaction-based data, Halifax’s index is based on its mortgage offers, so it already will have captured the impact of the rise in borrowing costs.

“Looking ahead, the recent further decline in new buyer interest reported by RICS and NAEA, as well as the drop in consumer confidence, indicates that upward pressure on prices will remain modest.

“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.”