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House Price Growth Remained Stable at the End of 2016

The average rate of annual house price growth has remained at 4.5% for the second consecutive year, according to a new report.

Nationwide: UK House Price Growth Stable in 2016

The average rate of annual house price growth has remained at 4.5% for the second consecutive year, according to a new report.

2016 saw the UK housing market continue to grow at a steady rate, according to Nationwide’s latest UK house price index, in spite of challenging conditions.


East Anglia emerged as the UK’s best location for property value growth, with the average price in the region increasing by 10.1% year-on-year to £218,544.


The Outer South East and Outer Metropolitan areas – both of which surround London – achieved the next highest annual growth, with increases of 6.9% and 6.8% respectively over the course of the past 12 months.


In the capital, the moderation of house price growth continued to affect London property prices, with annual growth of 3.7% - placing it below the UK average of 4.5% for 2016.


This marks the first time that London has been below the UK average since 2008 and the first time it has not been the top performing region since 2010.


Looking ahead to 2017, Nationwide’s chief economist, Robert Gardner indicated that house prices were likely to continue their growth, but at a more moderate rate of around two percent over the course of the year.


Commenting on the figures, Mr Gardner said: ‘The story of UK house price growth in 2016 was one of relative stability. Annual house price growth ended 2016 at 4.5%, the same as the rate recorded in 2015.’


‘Like most forecasters, including the Bank of England, we expect the UK economy to slow modestly next year … But we continue to think a small gain – around two percent – is more likely that a decline over 2017 as a whole, since low interest rates are expected to underpin demand while a shortage of homes on the market will continue to provide support for house prices.’


The projections stand in line with the forecasts revealed earlier this week by fellow mortgage lender, Halifax. The bank stated that they expect property prices to rise between 1% and 4% over the course of 2017.

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