House Price Growth Accelerates In December

House prices rose at their fastest pace since April (LSE: 0N69.L - news) this month according to latest figures from Nationwide.

The lender said prices rose by a faster-than-expected 0.8% in December, after an increase of just 0.1% the month before.

It (Other OTC: ITGL - news) meant that year-on-year growth accelerated to 4.5%, up from 3.7% in November. It puts the average house price at £196,999.

The lender expects growth of 3-6% over the next 12 months.

Nationwide chief economist Robert Gardner said: "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."

All regions of the UK saw house prices rise over the year except for Scotland, where they fell by 1.9%.

The gap (NYSE: GPS - news) between average house prices in the north and the south of England widened by £23,000 to £159,000, as the south continued to outperform the rest of the country.

For the fifth year running, London saw the strongest growth at 12.2% taking the average property value in the capital to £456,229.

Mr Gardner said: "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."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The stronger Nationwide data for December reinforce our belief that house prices are likely to see solid increases over the coming months."

He said increases would be supported by rising wages and employment, buoyant consumer confidence, and low mortgage rates as well as a shortage of properties (Other OTC: UBGXF - news) .