London lags UK as house prices rise steadily in 2016
The average UK house price stood at £205,898 in December
roperty values have increased by 4.5pc across 2016 - and for the first time since 2008 the rate of house price growth in London has ended the year below the national average, according to an index.
The average UK house price stood at £205,898 in December, marking a 0.8pc month-on-month increase, Nationwide Building Society said.
The 4.5pc annual increase in house prices across the UK recorded in December was the same as the uplift recorded in December 2015, indicating that the last year has seen "relative stability" in the market, the report said.
Looking across the UK, East Anglia has seen the strongest house price growth over the last year, with a 10.1pc annual increase taking average property values there to £218,544.
In London, house prices have grown by 3.7pc over the year, reaching £473,073 on average. Regions where annual house price growth is now growing at a faster annual rate than London include the South West of England at 4.4pc, the West Midlands at 4.1pc, and Yorkshire and Humberside at 4pc.
Robert Gardner, Nationwide's chief economist, said: "There were signs that London's significant period of outperformance may be drawing to a close.
"For the first year since 2008, annual house price growth in the capital was lower than the UK average, with prices increasing by 3.7pc over the year, down from 12.2pc in 2015.
"The South of England as a whole continued to see slightly stronger price growth than the North of England, though the differential narrowed.
"Price growth in Wales, Scotland and Northern Ireland remained subdued, though each saw small gains overall in 2016."
House prices in Scotland have increased by 2.2pc annually to reach £142,895 on average. Property values in Wales have lifted by 2.4pc annually, taking the average price there to £146,049. House prices in Northern Ireland have edged up by 0.7pc over the last year, taking the typical value there to £129,385.
Nationwide reiterated a forecast that house prices are likely to grow by around 2pc in 2017, although the figure would depend on how the economy fares.
"The fact that the housing market is seemingly struggling to build momentum after coming modestly off its August lows reinforces our suspicion that it is likely to find life increasingly difficult as 2017 progresses," said Howard Archer, chief UK and European economist at IHS Markit.