ANNUAL price growth for 2016 ended at the same level as a year ago, according to Nationwide.

The bank’s final house price index for the year showed that 2016 ended with 4.5 per cent annual house growth – the same as in 2015.

Commenting on the figures, Nationwide’s chief economist Robert Gardner described the UK property market in 2016 as having been stable.

He did, however, highlight signs that London’s property “outperformance” may be ending, with price growth in the capital at below the UK average for the first time in eight years.

“The story of UK house price growth in 2016 was one of relative stability. Annual house price growth ended 2016 at 4.5 per cent, the same as the rate recorded in 2015,” said Mr Gardner.

“There were signs that London’s significant period of outperformance may be drawing to a close. For the first year since 2008, annual house price growth in the capital was lower than the UK average with prices increasing by 3.7 per cent over the year, down from 12.2 per cent in 2015.”

In terms of regional differences he said the gap between house prices in the North and South had started to close: “The South of England as a whole continued to see slightly stronger price growth than the North of England, though the differential narrowed.”

Price growth in Wales, Scotland and Northern Ireland remained subdued, though each saw small price gains overall in 2016.

Mr Gardner’s prediction for 2017 is that there will be a modest slowdown in economic growth however, low interest rates and a continued shortage of properties will help to sustain house prices.

“Like most forecasters, including the Bank of England, we expect the UK economy to slow modestly next year, which is likely to result in less robust labour market conditions and modestly slower house price growth.

“But we continue to think a small gain – around two per cent – is more likely than a decline over 2017 as a whole, since low interest rates are expected to help underpin demand while a shortage of homes on the market will continue to provide support for house prices.”