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Average house price increased by £12,000 in the year to December, says index

By Vicky Shaw, Press Association Personal Finance Correspondent

House prices ended last year £12,000 higher on average than they had been 12 months earlier, according to official figures.

The average UK house price was £227,000 in December 2017, which was £12,000 higher than in December 2016, an index released jointly by the Office for National Statistics (ONS), Land Registry and other bodies said.

Annual house price growth accelerated to 5.2% in December, from 5% in November.

Average UK house price (PA Graphics)

On a month-on-month basis, house prices increased by 0.4% in December.
Annual house price growth in December stood at 5% in England, 5.4% in Wales, 7.7% in Scotland and 4.3% in Northern Ireland.

Within the English regions, the South West showed the highest annual growth, with prices increasing by 7.5% in the year to December 2017.

The lowest annual growth was in London, where prices increased by 2.5% over the year.

(PA Graphics)

Across the UK generally, the local authority showing the largest annual growth in the year to December 2017 in the study was the Orkney Islands, where prices increased by 18.2% to stand at £147,000 on average.

The lowest annual growth was recorded in Kensington and Chelsea, where prices fell by 10.7% to stand at £1.2 million on average – although the London borough still has the highest average house prices.

The least expensive place to buy a property is Burnley in Lancashire, where the average house price is  £78,000.

The report cautioned that low sales numbers in some local authority areas can lead to volatility in the house price growth figures.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “The increase in prices for December, albeit at a slowing pace, reflects more the shortage of available property to buy at that time rather than market strength or otherwise, as transaction numbers were relatively low.

“Since December we have noticed more balance with a slower increase in instructions and viewings as we would expect at this time of year, although some buyer caution is likely to remain until the market finds its new level this year.”

Howard Archer, chief economic adviser at the EY Item Club, said the latest survey evidence also points to “lacklustre housing market activity” in early 2018.

He said: “House-buyers will also likely be concerned about further interest rate hikes in 2018 following November’s first tightening of monetary policy by the Bank of England since 2007.”