UK house price growth was fairly steady in 2016, helped by prices rising more than expected over the past month, says Nationwide, but it expects a slowdown in 2017.
According to the high street lender’s latest data, average prices have gone up by 4.5% over the past 12 months.
That’s more than the 4.4% recorded in November and much more than the consensus estimate of 3.8%.
The strong finish to the year comes after the market slowed in the aftermath of the Brexit vote, with prices, like the economy, rallying since.
“The proverbial kitchen sink has been thrown at the housing market during 2016 - namely Brexit uncertainty and multiple tax changes - but prices are still creeping up,” said Guy Smith, director of investments at Property Partner.
“The combination of record low borrowing rates propping up demand and a severe shortage of both housing stock and available homes for sale has meant prices have continued to rise.”
Smith also reckons that the UK housing market will continue to outperform most other investments over the longer-term.
Despite the strong finish to 2016, Nationwide does expect the rate of growth to slow slightly in the New Year.
The building society reiterated its previous guidance that house prices are likely to grow by around 2% in 2017, although it added that the UK’s economic performance as a whole would play a key part in price movements.
Nationwide also noted that 2016 was the first year since 2008 that house price growth in London was slower than the British average.
Most of the housebuilders made some early gains this morning, albeit fairly small ones, including Bovis Homes Group PLC (LON:BVS) after it warned on profits yesterday.
Redrow plc (LON:RDW), Berkeley Group Holdings PLC (LON:BKG) and Taylor Wimpey PLC (LON:TW. were also up slightly on Thursday.