December was a bumper month for property as house prices experienced their biggest monthly rise in eight months, new figures reveal.
House prices in the UK grew 0.8 per cent on November, the largest increase since April when prices rose one per cent on the previous month, with the average price coming in at £196,999 at the end of the year. House prices are now 4.5 per cent higher than a year ago.
“After moderating during the first six months of 2015, house price growth remained in a narrow range between three per cent and 4.5 per cent in the second half of the year. This is broadly in line with earnings growth and close to the pace we would expect to prevail over the longer term," said Nationwide chief economist Robert Gardner.
"However, as we look ahead to 2016, the risks are skewed towards a modest acceleration in house price growth, at least at the national level, despite the likelihood of interest rate increases from the middle of next year."
The hot London housing market experienced the biggest growth in 2015, up 12 per cent year-on-year and now 50 per cent above their pre-crisis peak of 2007, compared to outside London where prices are around seven per cent higher.
Nationwide predicts a rise of between three and six per cent across the UK next year.
"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," added Gardner.