Halifax has reported that house prices in the last three months of 2017 were 2.7% higher than in the same three months a year earlier.
However, the annual change in December was lower than in November (3.9%).
The average price of £225,021 at the end of the year is 2.4% higher than in January 2017 (£219,741)
House prices in the final quarter (October-December) were 1.3% higher than in the previous quarter (July-September), down from 2.3% recorded in October and November.
On a monthly basis, prices also fell by 0.6% from November following a 0.3% increase in both October and November; this is the first fall since June 2017.
Russell Galley, managing director, Halifax Community Bank, said: “As we’d anticipated, the housing market in 2017 followed a similar pattern to the previous year. House price growth slowed, whilst building activity, completed sales and mortgage approvals for house purchase all remained flat. This has been driven by a squeeze on real wage growth and continuing uncertainty over the economy.
“However, nationally house prices in 2018 are likely to be supported by the ongoing shortage of properties for sale, low levels of housebuilding, high employment and a continuation of low interest rates making mortgage servicing affordable in relative terms. Overall we expect annual price growth to continue in the range of 0-3% at the end 2018.”
Jeremy Duncombe, director of Legal & General Mortgage Club, added: “Following last week’s Nationwide house price figures, today’s results show a similar end to 2017. Year-on-year house price growth is now far more in line with wage inflation and, coupled with low mortgage rates, sets the market on a strong footing for 2018.
“House price inflation looks likely to hold steady in the short-term, which will give first-time buyers a greater chance of stepping onto the property ladder. With thousands of mortgage products now available, anyone who is unsure of where to begin should get in touch with a mortgage broker for advice. The clarity and support that brokers provide will not only help buyers achieve their dream of homeownership much more easily, but will also ensure that they get the best deal possible.”