Annual house prices rose 1.3% in December, up from the 0.3% recorded in November, while on a monthly basis, prices grew 2.2% compared to a drop of -1.2% the previous month, according to the latest Halifax House Price Index.
However, house prices in the three months to December were 0.4% lower than in the preceding three months, from July to September.
The report also showed that the average house price stood at £229,729 in December 2018 from £224,860 in November and £223,116 the previous year.
Russell Galley, managing director of Halifax, said that in 2019 it is expected a continued stability in house prices with between 2% and 4% price inflation, slightly stronger than 2018 but still dependent on the Brexit outcome.
He added: “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.
“This year, mortgage payment affordability is more difficult to predict. There are competing pressures with signs of positive annual pay growth supporting affordability, but risks associated with the potential for higher interest rates are pulling in the other direction. On balance we do not see affordability pushing house price growth significantly in either direction.
“The shortage of homes for sale and continuing low levels of house building both constrain the supply of houses, and in turn support high prices, which will continue to inhibit demand in 2019.”
Specialist lenders are on the rise
Steve Seal, director of sales and marketing at Bluestone Mortgages, said that although statistics show that house price growth remains moderate, more can be done to ensure dreams of home ownership are not dispelled.
He added: “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 £1bn 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, home ownership is within reach.”
Kevin Roberts, director of Legal and General Mortgage Club, said: “Despite annual house price growth still being on the rise, we’re seeing much more sustainable levels of growth.
“Couple this with lenders lowering interest rates for small deposit buyers and first-time buyers are getting much-needed support to get onto the housing ladder.
“It’s not just lenders that are stepping up to help buyers though. Government schemes such as Help to Buy and Shared Ownership continue to play a positive role in our housing market too. With a wide range of innovative solutions and support on hand for buyers, we hope to see more and more individuals take their step into home ownership over the year ahead.”