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House price growth hit year-high in December

UK house prices showed the biggest growth in more than a year in December.

The Nationwide’s monthly House Price Index showed growth at 1.4 percent in the last month of 2019.

This was the first time price growth had gone above 1 percent in 12 months, putting the average property value at £215,282.

The Nationwide said house price growth was “broadly stable”.

Pace of growth slowed

Its chief economist, Robert Gardner, said: “Indicators of UK economic activity were fairly volatile for much of 2019.

“But the underlying pace of growth appeared to slow through the year as a result of weaker global growth and an intensification of Brexit uncertainty.

“The underlying pace of housing market activity remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.”

House prices expected to stay flat

And he added: “Healthy labour market conditions and low borrowing costs appear to have offset the drag from the uncertain economic outlook.

“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”

The December House Price Index also showed that first-time buyer numbers are continuing to return to their pre-2009 financial crash level.

In the 12 months to October 2019, 354,400 first-time buyers got a foot on the property ladder. Meanwhile, the Nationwide’s analysis of the data suggests affordability, outside of London, is within the grasp of first-time buyers.

1st-time buyer trend is up

Robert Gardner said: “The trend is partly due to robust labour market conditions, with employment rising at a healthy rate in recent years and earnings growth slowly regaining momentum.

“Low borrowing costs have also provided important support.

“Even though house prices remain high, relative to average incomes, the cost of servicing the typical mortgage as a share of take-home pay has remained close to or below long run averages in most parts of the country.”