UK house prices up by 2.6%

UK annual house price growth ended the year at 2.6%, within the 2-4% range that prevailed throughout 2017, according to Nationwide.

This was in line with expectations and broadly consistent with the 3-4% annual rate of increase Nationwide expects to prevail over the long term.

However, it marked a modest slowdown from the 4-6% rates of house price growth recorded in 2016.

Robert Gardner, Nationwide's chief economist, said low mortgage rates and healthy employment growth continued to support demand in 2017, while supply constraints provided support for house prices.

But this was offset by mounting pressure on household incomes, which exerted an increasing drag on consumer confidence as the year progressed.

Gardner said: "The impact of previous policy changes (including additional stamp duty on second homes, changes to tax deductibility of landlord expenses and lending criteria) meant that demand from buy to let investors remained subdued in 2017."

London saw a particularly marked slowdown, with prices falling in annual terms for the first time in eight years, albeit by a modest 0.5%. London ended the year the weakest performing region for the first time since 2004.