Annual UK house price growth remained stable in 2016 according to the latest Nationwide House Price Index, ending at 4.5%, the same rate as 2015.
Interestingly, London’s annual growth of 3.7% was below the UK average for the first time since 2008, and significantly lower than the 12.2% experienced in 2015. Prices have stabilised following a spike in activity earlier this year prior to the introduction of the stamp duty surcharge.
In 2017, Nationwide are predicting a more muted gain of around 2%, with their chief economist, Robert Gardner, suggesting that growth will depend on ‘developments in the wider economy, around which there is a greater degree of uncertainty then usual’.
Continuing low interest rates are expected to support demand and a shortage of properties on the market means that a small amount of growth is likely.
December’s report also takes a look at the differences in affordability across the UK. Areas such as Scotland and the East Midlands have seen improvements over the last decade, however in London and the South East people are borrowing a greater multiple of their income or even finding themselves priced out of the market.
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Annual house price growth stable in 2016