UK house prices were 4.0% higher in December than the same month a year earlier, according to new data published in the Halifax House Price Index.

The latest Index suggested this growth was driven by house prices rising on a monthly basis by 1.7%, pushing up the year-on-year growth rate to reflect that December 2018 had been a ‘particularly weak month.’

Confirmed figures for the latest quarter between October and December showed house prices were 1.0% higher than in the preceding three months.

Halifax managing director, Russell Galley, said: “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 into next year.”

The Index also indicated mortgage approvals had risen slightly since October. Bank of England figures showed the number of mortgages approved to finance house purchases was 64,994 in November – a 0.5% month-on-month rise after a fall of 1.8% in October, and reflecting a year-on-year growth of 1.4%.

Commenting on December showing the biggest house price growth in 2019, Trussle head of mortgages, Miles Robinson, suggested buyers and sellers, who may have been ‘holding off from making their move’ amid economic and political uncertainty, could be ‘beginning to act.’

“Moving forward, it’s vital that the Government consider how best to support first-time buyers following the closure of the Help-to-Buy ISA. House price growth is increasing, which means the deposit that would-be homeowners need is rising too,” Robinson said.

“The good news is that there are competitive mortgage deals available. However, with increasing speculation that the Bank of England might raise interest rates, a fixed-rate deal could be a suitable option for those preparing to buy or remortgage.”

Group chief executive at Andrews Property Group, David Westgate, added that there is an ‘exceptional’ amount of pent-up demand in the market with the potential to drive prices higher throughout 2020.

Westgate said: “The fact we now have a five-year administration with a strong mandate and clear political objective will create confidence and bring back the aspirational buyers and sellers who have been lacking since the EU Referendum result.

“Low borrowing costs and a strong jobs market will reinforce the renewed sense of optimism many people are feeling.”

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