The annual price growth of houses in the UK in 2016 ended at 4.5 per cent, the same as that of 2015, per the House Price Index for December 2016, released by Nationwide. This revelation is a relief, especially for investors and landlords, following the brief lull in the market during mid 2016 in view of Brexit.

The Index showed that the residential property market has bounced back by year-end. As expected, the price growth was stronger in south England, indicating the continued demand for quality housing from cities in this region. The growth of house prices in Scotland, Wales and Northern Ireland, however, was stagnant, the Index revealed.

The rise in the prices of homes is likely to continue into 2017 owing to shortage in supply of homes entering the housing market. While 2016 saw acute shortage of homes, the increased demand will further put pressure on prices of homes this year. Though the government has announced several measures to cool down the house prices, the impact must be studied during the second half of 2017.

It is to be seen what the housing sector holds for investors in 2017. A lot depends on the UK economy, but international investors will benefit from weak sterling exchange rate.