2.2% jump in property prices in December lifts annual rate of inflation for 2018 to 1.3%
House price inflation recovered in December following November’s 1.2% decline, according to the latest research.
According to the Halifax house price index, the price of a home in the UK increased by an average of 2.2% between the months, lifting the final annual rate of growth for 2018 to 1.3%, up from the 0.3% rate recorded in November.
This means house price growth for the year fell within the 0% to 3% range the bank had predicted at the beginning of 2018 although, on a quarterly basis, house prices declined by 0.4% between October and December compared to the previous quarter.
Looking ahead to 2019, Halifax predicts property prices will continue to grow at a steady rate, forecasting inflation of between 2% and 4%.
Whilst the bank recognises that their prediction will be significantly influenced by the outcome of Brexit, it notes that other factors will impact future growth.
It highlights the difficulties buyers face saving for a large deposit and higher mortgage repayments with potential increases to the base interest rate as being notably significant for future changes in house prices.
Concluding the year’s final index, Halifax’s Managing Director Russell Galley said: “The shortage of homes for sale and continuing low levels of housebuilding both constrain the supply of houses, and in turn support high prices, which will continue to inhibit demand in 2019.”
According to the latest Housing Pipeline report by the Home Builders Federation, there was a 2% increase in the number of homes granted planning permission in the year to October 2018.