UK house prices expected to rise 6pc in 2016

British house price are likely to rise more slowly next year, at 4 to 6 per cent, compared with growth of nearly 10 per cent in the past 12 months, mortgage lender Halifax forecast.

Last year, Halifax said house prices would rise by 3 to 5 per cent this year. But its own figures have shown growth of more than twice that in the year to October.

“House prices look expensive compared to incomes but valuations are supported by the low levels of property for sale, low levels of housebuilding and exceptionally low interest rates,” Halifax housing economist Martin Ellis said.

The failure of the Bank of England to increase interest rates, as markets had expected this year, was a key reason why house prices had risen faster than forecast, Ellis added.

MORE REPORT: UK house prices rise faster than expected in April

Other data showed a slower rate of increase than Halifax’s numbers. The Office for National Statistics has reported a 6.1 per cent gain for the year to September.