House prices up 1.2% in December

Posted: 29 Dec 2006 10:16:18 GMT

House prices in the UK rose an average 1.2 per cent during December, traditionally the slowest month in the property market, Nationwide figures have shown

House prices in the UK rose an average 1.2 per cent during December, traditionally the slowest month in the property market, Nationwide figures have shown.

The increase brings the annual rate of inflation to 10.2 per cent, the highest recorded since February 2005, with the average price reaching £173,746.

"Both housing market and weather forecasters were surprised by the warm climate this year," said Nationwide group economist Fionnuala Earley.

"The temperate weather is likely to have played only a minor role, but the housing market clearly warmed up during the year.

"House prices increased three and a half times faster than last year and returned to double digits for the first time since February 2005."

The market shows no sign of running out of steam soon said Nationwide, although affordability is likely to present barriers to growth in the second half of 2007.

The building society estimates that property prices will grow between five and eight per cent over the course of the year.


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