Halifax’s house price index has revealed that the quarterly rate of house price increase has now fallen for five successive months.
Martin Ellis, housing economist at Halifax, said annual house price growth eased further, to 7.8 per cent in December, compared with a peak of 10.2 per cent in July.
He explained that the deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, has combined to temper housing demand since the summer.
“The weakening in housing demand has led to a reduction in both price growth and sales in recent months.
Mr Ellis stated that Halifax expects a further moderation in house price growth over the coming year, with prices nationally predicted to increase in a range of 3-5 per cent in 2015.
“Housing demand, however, should continue to be supported by a growing economy, rising employment levels, still low mortgage rates and the first gain in ‘real’ earnings for several years.”
But Alex Gosling, managing director, online estate agents Housesimple.co.uk, said that after a slow December, the New Year has kicked off with gusto.
Mr Gosling commented: “Buyer activity is strong, and the next few months could be the busiest we’ve seen for a while, as purchasers look to take advantage of the new stamp duty rates and buy before the general election.”