House prices up 4.5% in 2016 amid 'relative stability' in the property market

Property values have increased by 4.5% across 2016 – and for the first time since 2008 the rate of house price growth in London has ended the year below the national average, according to an index.

The average UK house price stood at £205,898 in December, marking a 0.8% month-on-month increase, Nationwide Building Society said.

The 4.5% annual increase in house prices across the UK recorded in December was the same as the uplift recorded in December 2015, indicating that the last year has seen “relative stability” in the market, the report said.

Looking across the UK, East Anglia has seen the strongest house price growth over the last year, with a 10.1% annual increase taking average property values there to £218,544.

In London, house prices have grown by 3.7% over the year, reaching £473,073 on average. Regions where annual house price growth is now growing at a faster annual rate than London include the South West of England at 4.4%, the West Midlands at 4.1%, and Yorkshire and Humberside at 4%.

Robert Gardner, Nationwide’s chief economist, said: “There were signs that London’s significant period of outperformance may be drawing to a close.

“For the first year since 2008, annual house price growth in the capital was lower than the UK average, with prices increasing by 3.7% over the year, down from 12.2% in 2015.

“The South of England as a whole continued to see slightly stronger price growth than the North of England, though the differential narrowed.

“Price growth in Wales, Scotland and Northern Ireland remained subdued, though each saw small gains overall in 2016.”

House prices in Scotland have increased by 2.2% annually to reach £142,895 on average. Property values in Wales have lifted by 2.4% annually, taking the average price there to £146,049. House prices in Northern Ireland have edged up by 0.7% over the last year, taking the typical value there to £129,385.

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