House Market in 2017

UK house prices inflation picked up during the final month of 2016. House prices rose 0.8% in December according to the Nationwide, having stalled during November. The Nationwide house price index recorded a 4.5% rise in prices against a year earlier. This compares to an annual rise of 4.4% in November. The rise in prices is an indication that the UK housing market has shaken off some of the initial disruption and market slowdown seen in the immediate aftermath of the EU referendum vote and reflects the general strength of consumer spending that has help drive the wider economy during the second half of last year. Less encouragingly, the number of mortgages approved by British banks fell slightly in November after hitting a five-month high in October. Data from the British Bankers' Association (BBA) show that banks approved 40,659 mortgages in November, down from 40,835 in October and 9% lower than a year ago. The weakening in approvals signals fewer property transactions over the coming months. Against this background and with the prospect of slower UK economic growth, the Nationwide has reiterated its forecast that house prices growth is likely to slow to around 2 percent in 2017. Similarly the Royal Institution of Chartered Surveyors (RICS) expects that average house prices to rise by 3% this year.