Property price growth stalled in early 2017, reports show

Property price growth stalled in early 2017, reports show [Photo: BrianAJackson via iStock]

The rate at which property prices in the UK have been rising has slowed in the early part of the year, thanks to a month-on-month drop in prices paid, according to data released this week by Halifax. 

According to its latest report, the price that people were having to pay for homes fell in January to £220,260, down some 0.9 per cent when compared to December 2016. This is a surprising drop given the swell in activity that often takes place at the start of any given year, and it means that overall price growth has slowed. 

The bank said that the year-on-year rate of growth in the UK now sits at some 5.9 per cent, and while this is still an impressive rate of increase, it does mark a downturn compared to the 6.5 per cent annual climb that was in evidence in December of last year. 

However, while annual growth levels remain well below the ten per cent that was being recorded as recently as March last year, Martin Ellis, Halifax housing economist, said that quarterly growth rates remain impressive. 

"UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. These factors are unlikely to change materially during 2017," he said of the 2.4 per cent increase over the last three months. 

"Nonetheless, weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in some downward pressure on annual house price growth during the year." 

However, most experts predict that the market will actually continue to perform well over the course of the year ahead, saying that performance over the last turbulent 12 months shows that the property sector cannot be underestimated in terms of how well it rebounds from short-term slowing.