Annual house price growth at weakest since July 2013, says Halifax

House prices in the three months to February were up 5.1% from the same period the year before, but down compared to a 5.7% increase in the three months to January, according to data from lender Halifax.

The increase was weaker than the 5.3% analysts had expected and marked the lowest annual rate of growth since July 2013.

House prices were up 0.1% in February compared to the month before, when they fell a revised 1.1%, missing expectations for a 0.4% jump.

On a quarterly basis, prices were up 1.7%, down from 2.3% in January.

Martin Ellis, Halifax housing economist, said: “Housing demand is being supported by an economy that continues to perform well with employment still expanding. Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices.

“The annual rate of house price growth has, however, nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home. This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017.”

Howard Archer, chief UK and European economist at IHS Markit, said: “February’s slight rise in house prices reported by the Halifax fuels our belief that house price gains over 2017 will be no more than 3% and could well be less.

“Weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios are likely to weigh down on house prices. However, a shortage of supply is likely to put a hard floor under prices.”