UK house price growth accelerated at the end of 2016, adding £3,000 to the average cost of a property in one month.
According to official figures published on Tuesday, prices rose 7.2 per cent in the year to December, compared with a 6.1 per cent rise in the year to November.
The housing market cooled in July after the EU referendum. But more recently there have been signs of a recovery, and there is no evidence of the stagnation in prices that the Treasury predicted would result from a vote for Brexit.
However, analysts warned against interpreting the latest figures as the start of a renewed phase of house price growth.
“We continue to expect house price growth to slow sharply this year,” said Samuel Tombs of Pantheon Macroeconomics.
“Household incomes will be squeezed by high inflation, while lenders soon will increase mortgage rates to account for the recent rise in wholesale funding costs.”
New regulations limiting the amount that buy-to-let investors can borrow, which came into effect at the start of January, are also expected to dampen growth.
The average UK house cost £220,000 in December, £15,000 higher than in the same month in 2015 and £3,000 more than in November, according to the Office for National Statistics.
In England, the average house price is now £236,000, against £148,000 in Wales and £142,000 in Scotland.
London still has the highest average price, at £484,000; in the year to December 2016, prices increased 7.5 per cent in the capital.
However, the east of England had the highest annual growth rate, with prices increasing 11.3 per cent in the year to December 2016. Growth in the south-east of England was 8.5 per cent for the year. London was the third fastest-growing region.
The ONS said on Tuesday that the latest annual figures reflected the continued “strong growth seen since the end of 2013” but that annual growth had been “weaker” in the second half of 2016 than in the first six months of the year.
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