House prices bounced

House prices bounced up 1.7% in December to stand at £208,286, the Halifax has reported.

The figure compares with £204,830 in November, and is 9.5% higher than the £189,428 recorded in December 2014.

The annual increase is the largest since 2006, the year before the last housing market downturn started to savage the industry.

On a quarterly basis, average house prices rose by £36.50 a day from October to December.

Halifax housing economist Martin Ellis said there was a “substantial gap between demand and supply”, which is unlikely to change in the short term, “resulting in continuing upward pressure on prices”.

Capital Economics property economist Hansen Lu said house prices are out of kilter with wages, while still predicting house price inflation this year, albeit at a much slower rate.

He said: “We think the market needs to take a breather soon. Consequently, we see house price inflation dropping to 2% by the end of 2016.”