House price growth has remained below 2 per cent for the second successive month as the underlying value of properties begins to soften, according to Halifax.
Despite house prices being 1.6 per cent higher in the last three months compared to the preceding three months, Halifax pointed out the quarterly rate of change remained below 2 per cent, which is its lowest rate in 2015.
Martin Ellis, Halifax housing economist, said this indicates a “possible slight softening in the underlying rate of price growth”.
Halifax’s latest house price index revealed that prices in the three months to December were 9.5 per cent higher than in the same period a year earlier.
This was a little higher than November’s 9 per cent, keeping the annual rate in the 8 to 10 per cent range where it was for nearly all of 2015.
UK House Prices: Historical Data
All Houses, All Buyers (Seasonally Adjusted)
Mr Ellis said: “There remains a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale.
“This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices.”
Halifax figures found that home sales were up compared to a year ago, and between September and November sales were 5.2 per cent higher than in the same three months last year.
Mortgage approvals were also found to be on a steady upward trend, which the volume of mortgage approvals for house purchases increasing by 1 per cent in the three months to November, and 16 per cent higher than in the same period a year earlier.
Mark Posniak, managing director of Dragonfly Property Finance, said: “With supply as weak as demand is strong, it’s same-old, same-old on the house price front.
“Prices continue to rise, if at a slightly steadier rate over the quarter. The 1.7 per cent rise in December drives home the extent of demand. In the current environment, seasonal trends are arguably becoming less significant.
“Looking into 2016, it’s hard to see anything other than a continuation of the current trend of steadily rising prices, especially with interest rate rises in the near future unlikely.”
Mr Posniak sadded: “The jobs market is strong, consumers are confident and mortgage rates remain very low. Against this backdrop, further price rises are almost inevitable.”