House prices in the UK finished the year on a strong note, with the Halifax House Price Index recording an annual gain of 6.5 per cent compared to 2015.
The organisation noted that property values climbed by 2.5 per cent in the final three months of 2016 alone, compared to the previous quarter.
However, Halifax housing economist Martin Ellis was cautious about the outlook for 2017, explaining there are many factors that will slow growth in the coming months.
“Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017,” he stated.
Mr Ellis added that the shortage of property entering the market, coupled with low housebuilding activity and the exceptionally low interest rates, would help support prices, but that we should expect property price growth to slow to between one and four per cent over the next 12 months.
Despite this, the number of mortgage approvals climbed by six per cent in the final quarter of 2016, compared with the previous three months, which could indicate that sales are set to increase in the near term.
However, data released by the Council for Mortgage Lenders in December revealed that mortgage lending fell by a significant margin in October last year. The organisation’s figures showed that the amount borrowed by homeowners fell by eight per cent compared to September, and by 11 per cent year-on-year.
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