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December Sees a Hike in House Prices

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House prices saw a 0.8% rise in December 2015, in contrast to a 0.1% rise in November of the same year. 

Nationwide claims the rise in house prices matched average salary growth in 2015, and that similar predictions are being made for this year. Chief economist, Robert Gardner, forecasts average house price growth of between 3 and 6% this year. 

There has been some difference of opinion between property institutions; Nationwide suggests that house prices rose by 4.5% overall in 2015, with London topping the growth trend at 12%. The Land Registry put the average figure closer to 5.6%, whereas Halifax claimed the figure to be much higher at 9%.

Nationwide predicts that house prices in London will not continue to grow to above-average figures this year, claiming that properties are becoming unaffordable for many in the city.

Compared to pre-crisis 2007 growth figures, the average UK house price is around 7% higher. 

Scotland bucked the trend in 2015 with an overall fall in average house prices, with values down 1.9% between October and December compared to the same period the year before. 

Robert Gardiner forecasts an acceleration in average UK house prices for 2016 but at a modest pace, because of rises in employment and wages that we are likely to see this year. Borrowing, he suggests, are expected to rise only gradually. The main concern, according to Mr Gardiner, is that construction activity will fall behind demand, increasing the pressure on house prices and eventually reducing affordability. He also warned that average house prices will bear the brunt of the house price/ earnings ratio, tighter checking of prospective mortgage borrowers and the likelihood of slowly increasing interest rates during 2016.

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The above is not legal advice; it is intended to provide information of general interest about current legal issues.