Poor wage growth behind housing slowdown, says Halifax

The Halifax is blaming poor growth in wages for a continuing slowdown in house prices.

The lender said that prices in 2014 rose by 7.8% - well down from the peak in July, when prices went up by 10.2% compared with a year earlier.

In the three months to December, the cost of a home went up by just 0.3% - marking five months of declining quarterly inflation.

It said that slow growth in real-terms wages was one of the main reasons.

Martin Ellis, the Halifax's chief economist, highlighted "earnings growth that has been consistently below consumer price inflation until very recently".

Average weekly earnings overtook inflation in September 2014, for the first time in five years.

Figures published in December showed average weekly earnings - excluding bonuses - rising by 1.6% a year.

Inflation, as measured by the Consumer Prices Index (CPI), is currently running at just 1%.

Martin Ellis said another reason for moderating prices was that property had become less affordable.

The average price of a house or flat in the UK is now £188,858, said the Halifax.