House price growth has fallen to its lowest level for over a year, according to Nationwide.
The lender’s house price index shows the average house price reached £188,559 in December, compared to £189,388 in November. On a seasonally adjusted basis, house prices are up 0.2 per cent month-on-month.
House prices are up 7.2 per cent on an annual basis, from £175,895 a year earlier, but down from 8.5 per cent in November.
December marks the fourth consecutive month in which annual growth rates have fallen and the lowest level since the 6.5 per cent annual growth recorded in November 2013.
Yearly growth figures show house prices rose 7.2 per cent over the course of 2014, down from the 8.4 per cent recorded over 2013.
Nationwide chief economist Robert Gardner says: “December marks the fourth consecutive month in which annual growth has moderated, despite house prices increasing by 0.2 per cent month-on-month in December. The 7.2 per cent increase recorded over the year as a whole, is modestly lower than the 8.4 per cent gain recorded in 2013.
“While cooling in the London market is a part of the story, this is not the main explanation for the slowdown evident in the UK figures in recent months. Indeed, annual price growth in the capital continued to outpace every other region in the UK, at 17.8 per cent in Q4. Overall, 12 of the 13 UK regions saw the pace of annual price growth slow.”
Gardner also notes while house prices have moderated, there has been a more acute fall in the number of approvals, with October seeing 22 per cent year-on-year fall. However, continued economic improvement, he says, will help to boost approvals again.
He says: “If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead. Supply side developments will be crucial in determining the trajectory for prices. There are encouraging signs that construction is starting to pick up. Hopefully, this will set the stage for house price growth gradually converging with income growth in the quarters ahead.
“Recent changes to stamp duty may also have a modest positive effect on demand, especially in the South of England and Scotland.”