UK house prices rose in December at fastest pace since 2013, Halifax says

Average home cost £238,963 after surprise jump of 4% last year

Howard Archer, chief economic adviser at EY Item Club described Halifax's figures as a “major surprise” (Getty)

House prices recorded surprise growth of 1.7 per cent in December, the fastest pace in almost seven years, according to an index.

For the whole of 2019, average prices increased by 4 per cent to £238,963, Halifax said.

The Halifax index shows stronger house price growth across 2019 than an index released by Nationwide Building Society last week, which said property values ended 2019 1.4 per cent higher than at the start of the year.

Howard Archer, chief economic adviser at EY Item Club, described Halifax's figures as a “major surprise”.

He said: “Halifax reported that house prices jumped 1.7 per cent month-on-month in December – this was the largest monthly increase since February 2007 and followed a marked increase of 1.2 per cent in November.

“The year-on-year increase in house prices spiked to 4 per cent in December. This was the largest increase since February 2018, and up from 2.1 per cent in November.”

Mr Archer added: “It is possible that house prices got a boost in November and December from some buyers keen to get their move done before the general election to avoid any shocks or uncertainties that could arise.”

However, he warned: “It should also be borne in mind that the Halifax measure tends to give higher house price readings than other measures.”

Halifax managing director Russell Galley said: “Average house prices rose by 4% over 2019, at the top of our predicted range of 2 per cent to 4 per cent growth for the year.

“Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households' real incomes.

“Longer-term issues, such as the shortage of homes for sale and low levels of house-building, will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand.

“As a result, we expect a modest pace of gains to continue.”

Jeremy Leaf, a north London estate agent and former residential chairman of the Royal Institution of Chartered Surveyors, said: “On the ground, there is no doubt that the election and more certainty on Brexit is contributing to a recovery in market confidence.

“Looking forward, we expect higher increases in values in areas where the ratio of house prices to earnings is lower.”

PA