House prices end 2016 just £47 shy of all-time high

December saw some of the strongest monthly growth since the beginning of the year, however, annual growth slowed slightly to 3.1% in December from 3.5% in November.

Prices have now almost fully recovered from the peak they reached in March 2016 ahead of the 3% surcharge on stamp duty on second homes and buy-to-let properties.

Every region in England and Wales finish the year with positive house price inflation. However London trailed the other regions of England and Wales, with house price growth of 0.2%, well below even the North East, up 1.5% over the year, or Yorks & Humber, up 2%.

Even Wales, which had more areas seeing price falls over the year than any other, was up 2.2% over the year, helped by 13.6% growth in Gwynedd and 10.3% in Blaenau Gwent.

The modest gain in average prices over the year disguises a massive variation in regional performance. Annual price growth has been as high as 16.2% in Hull while falls have been as deep as -11.5% in the London Borough of Hammersmith and Fulham.

The slowdown in transactions has been more consistent across the country, however. Since a strong start to the year, and a surge in March, sales have been lower each month than in either 2014 or 2015. Overall in 2016, they were down 3.9% on 2015 and for the last six months of the year fell 14.7% compared to 2015.

Oliver Blake, Managing Director of Your Move and Reeds Rains, commented: “It’s been a strong finish to an uncertain year. Despite the doubts over Brexit, prices have continued to grow, powered by good-value commuter properties.

“As the lower transaction figures since April show, the market faces challenges ahead, but it enters 2017 a lot stronger than many would have expected.”

Richard Sexton, director of e.surv chartered surveyors, added: “Even in the first half of last year London was the UK’s property hotspot, with the highest annual growth. At the end of the year, it trails every other region in England and Wales.

“In its place, the South East and other areas with good value property continue to grow strongly, and even in London itself cheaper boroughs have seen strong increases. It will be interesting to see how far the balance in the property market continues to shift from London to its surrounding areas in the coming year.”