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UK house prices round off weak quarter with December rebound

[LONDON] The UK housing market rebounded in December at the end of a weak fourth quarter.

Prices rose 1.3 per cent in the three months through December compared with a year earlier, up from 0.3 percent in November, Halifax said Tuesday. The monthly change, which can be volatile, was a 2.2 per cent gain to an average £229,729 (S$397,510), beating forecasts for a 0.5 per cent increase.

After a three-decade boom, British home prices are getting hit from uncertainty over Brexit and years of tepid wage growth. Nevertheless, the shortage of homes and low interest rates are supporting the market and preventing a sharper downturn.

Prices fell 0.4 per cent in the fourth quarter from the third quarter, Halifax said. The mortgage lender expects growth between two per cent and four per cent in 2019.

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"This is slightly stronger than 2018, but still fairly subdued by modern comparison," said Russell Galley, managing director at Halifax. "However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast."