House prices almost recovered to the March peak seen last year at the end of 2016, but transactions dropped by 3.9%, according to Your Move’s latest House Price Index.
The agent found that prices rose by 0.4% in December and by 3.1% on an annual basis, to an average of £297,678. This figure is close to Rightmove’s average asking price for January of £300,245.
The Your Move figure takes the average house price almost back to the £297,725 March peak reached amid the rush to beat last year’s Stamp Duty deadline.
House Prices Almost Recovered to March Peak at End of 2016
However, the annual rate of growth was down from 3.5% in November, while transaction figures for the final six months of the year show just how great the impact of the Stamp Duty reforms were, as sales dropped by 14.7%.
There was much variation across the country at the end of last year, with annual price growth as high as 16.2% in Hull and as low as -11.5% in the London Borough of Hammersmith & Fulham.
Overall, London has trailed the other regions of England and Wales, with house price growth of just 0.2% year-on-year.
The East of England recorded the highest annual increase of 2016, at 7.9%.
The Managing Director of agents Your Move and Reeds Rains, Oliver Blake, says: “It was 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 has entered 2017 a lot stronger than many would have expected.”
In terms of properties coming onto the market, Rightmove claims there is now an opportunity for first time buyers to get onto the ladder, as there is less competition from buy-to-let landlords.
Rightmove attributes the 13.2% decline in sales of smaller properties – those with two bedrooms or fewer – in December to less buy-to-let interest. As a result, the portal reports that available stock for sale in this sector is up by 1.9% on last year. This contrasts to January 2016, when availability of these properties fell by 18%.
Across the whole market, Rightmove puts the current average asking price at £300,245 – up by 0.4% on December and 3.2% annually.
The average time taken to sell a property rose to 72 days in December, up from 67 in November, while the average stock per member agent dropped from 56 to 51 over the same period.
Miles Shipside, the Director and Housing Market Analyst at Rightmove, comments: “The 0.4% monthly and 3.2% year-on-year price increases are indicators of the continued market momentum from the autumn.
“Demand for a suitable home is such that visits to the Rightmove website are still up by 5% year-on-year, despite being compared to a period that was boosted by high demand from buy-to-let investors rushing to beat the Stamp Duty deadline.
“Year-on-year comparisons for transactions in the first quarter of 2017 should also allow for the distortion of last April’s additional Stamp Duty tax deadline, as transactions were up 40% in the first quarter last year.”