Supply constraints and economic uncertainty held responsible

UK house prices rises have slowed to their lowest rate in nearly four years, with supply constraints and economic uncertainty to blame.

According to the latest Halifax Price Index, February saw a year-on-year increase of 5.1%, versus January’s 5.7% rise, the lowest annual rate of growth since July 2013.

Halifax also reported house prices in the three months to February were 1.7% higher than in the previous quarter; down from 2.3% in January.

Martin Ellis, Halifax housing economist, said housing demand was being supported by a growing economy and expanding employment, although the supply of both new homes and existing properties available for sale remained low.

“This combination is pushing up prices. The annual rate of house price growth has, however, nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home.

“This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017.”