Cost of living squeeze dents UK house price growth

Low mortgage rates and property shortage prevents bigger slowdown, as London prices fall for first time in eight years

UK house prices increased just 2.6% in 2017 while prices in London fell for the first time in eight years, according to the leading mortgage lender Nationwide.

This followed an increase of 4.5% in 2016 and was the slowest rate of annual growth since 2012, as households constrained by falling real pay grew increasingly reluctant to commit to major spending decisions.

Related: Six factors influencing the UK property market in 2018