House prices in the three months to December were 1.3% higher than in the same three months a year earlier, up from the 0.3% annual growth rate recorded in November, the latest Halifax House Price Index has revealed.

However, though this figure demonstrated growth over the 12 month period, looking at the figures on a quarterly basis, house prices in the latest quarter were 0.4% lower than in the preceding months (July-September).

Despite this, on a monthly basis, property prices increased by a significant 2.2% in December following a 1.2% decline in November, with the average house price across the UK last month being £229,729.

Commenting on the statistics, Halifax managing director Russell Galley said: “In 2019, we’re expecting continued stability in house prices with between 2% and 4% price inflation. This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast.

“Of course, there are a number of other factors that will impact the market in 2019. The need to raise a significant deposit still acts as a restraint for those looking to buy a new home, limiting the number of potential purchasers.”

Galley noted that, this year, mortgage payment affordability will be “more difficult to predict” as a result of competing pressures with signs of positive annual pay growth which supports affordability, but risks associated with the potential for higher interest rates are pulling in the other direction.

“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,” the Halifax director added.

Also commenting, Bluestone Mortgages director of sales and marketing Steve Seal: “With New Year resolutions in motion, it will be hoped that the market has some of its own – with the most important being to help more first-time buyers onto the property ladder. Although today’s statistics show that house price growth remains moderate, more can be done to ensure dreams of homeownership are not dispelled.

“High-street banks are still not catering for every borrower’s financial status, and as we see more people making the jump to self-employment, specialist lenders are on the rise - our Specialist Tracker research showed that 52% of mortgage brokers believe it would increase by at least £1 billion over the next six months.

“There’s no denying that specialist lenders are here to stay - reassuring borrowers that no matter what their financial situation is, homeownership is within reach.”

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