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House price rises accelerate in December

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The rate of increase in average house prices leapt to 0.8 per cent in December, according to figures from Nationwide.

It marks a steep increase from last month, when prices average prices climbed just 0.1 per cent.

On an annual basis, prices rose by 4.5 per cent through 2015, with the average price of a UK property reaching £196,999.

Separate figures from the Land Registry for England and Wales today showed prices increasing by 5.6% in the year to November, while the average price of a house or flat was listed as £186,325.

It comes after Halifax put the total 2015 growth in house prices at 9 per cent.

Nationwide chief economist Robert Gardner says the building society is expecting UK house prices to rise between 3 per cent and 6 per cent over 2016.

“Further healthy gains in employment and rising wages are likely to bolster buyer sentiment, while borrowing costs are expected to rise only gradually. However, the main concern is that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability,” he says.

“It remains an open question whether the striking divergence in regional house price performance evident in recent years will be maintained in 2016.

“Prices in the South of England, and especially in London, have been outpacing the rest of the UK by a wide margin. Indeed, prices in the South of England are now well above their pre-crisis levels while they remain below in Scotland, Wales and large parts of the North of England.

“With affordability metrics in the Capital stretched by historic standards, another year of above-average price gains appears unlikely.”

According to Nationwide, five UK regions saw the annual rate of growth slowdown in the last quarter of 2015, while seven saw increases accelerate.

Only Scotland saw prices drop through the year, while London saw prices rise 12 per cent.

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