House price inflation crept up in December

House price inflation crept up in December

UK house prices continued to grow at around 5 per cent, according to figures from the Office for National Statistics

Average house prices in the UK climbed 5.2 per cent in the year December 2017, according to the ONS house price index.

This was marginally higher than the previous month, when house prices increased by 5 per cent.

The annual growth rate has slowed since mid-2016, when it reached 8 per cent, and has been floating broadly around 5 per cent since October 2016.

The average price of a UK house in December 2017 was £227,000, £12,000 higher than the previous year and £1,000 higher than the previous month.

In contrast, average weekly earnings grew at a rate of 2.5% in the three months to November 2017.

Richard Snook, senior economist at PwC, commented: “Today's figure shows that house price growth has outpaced average earnings growth for the fifth consecutive year, further ratcheting up the affordability challenge.

"Cumulatively, house prices have increased by 22 per cent more than earnings between 2012 and 2017."

By region, London remained the most expensive, with the average house in the capital costing £484,000. The lowest average price could be found in the North East, at just £131,000.

The south west recorded the fastest annual growth at 7.5 per cent, while the lowest annual growth was in London at 2.5 per cent.

Jeff Knight, director of marketing at Foundation Home Loans, said property prices still look inflated due to limited supply.

He said: "It’s not been the best start to the year for sellers. People are holding off until they are in a better position to make such a big financial commitment, held back by lack of disposable income.

"That doesn’t change the fact that property prices are still inflated, underpinned by the lack of supply, and pent-up interest will continue to nudge properties just out of reach for those hoping to buy – even with the cut to stamp duty."