Mansion blocks in London.
With house price growth in the UK accelerating at the end of 2016, analysts have cautioned against taking it as a sign of a renewed phase of price growth, reported the Financial Times.
UK house prices climbed 7.2 percent in the year to December, up from the 6.1 percent increase seen in the year to November. With this, an average house cost £220,000 (S$389,697) in December, £3,000 (S$5,316) higher than in November, said the Office for National Statistics.
House price growth in the UK had been flat in the months following the Brexit vote in June, before picking up again in November, contrary to the Treasury’s expectation of price stagnation.
Despite this, analysts still expect prices to ease this year.
“We continue to expect house price growth to slow sharply this year,” said Samuel Tombs of Pantheon Macroeconomics.
“Household incomes will be squeezed by high inflation, while lenders soon will increase mortgage rates to account for the recent rise in wholesale funding costs.”
House price growth will also be dampened by new regulations aimed at curbing the amount that can be borrowed by buy-to-let investors.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
