House prices in the three months to December were 6.5% higher than in the same three months of 2015. Prices in the last three months (OctoberDecember) were 2.5% higher than in the preceding quarter.

Martin Ellis, Halifax housing economist, said: "House prices finished 2016 strongly. Prices in the final quarter of the year were 2.5% higher than in the previous quarter. The annual rate of growth increased, rising for the second consecutive month, from 6.0% in November to 6.5%. "Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017. UK house prices should, however, continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates".