London houses

The rate of growth in house prices rose strongly in December, according to Nationwide building society.

Nationwide said house prices were up 0.8% in December. That compared with growth of just 0.1% in November. For the whole of 2015, it said prices grew by an average of 4.5%, meaning the average price for a house in the UK is now £196,999.

Yesterday (Tuesday), independent estate agent Haart said it had seen the average price rise above £230,000 for the first time. There is often considerable variation between house price figures because companies often use their own data, for instance Haart used the value of properties listed with it. And Halifax, like Nationwide, monitors the amounts given to its own customers in mortgages.

Nationwide said the rise in house prices was generally mirrored by wages - a trend it expects to see continue into 2016. London prices grew by 12% compared with last year, but the building society does not believe the capital will continue to see above-average growth next year because prices are already unaffordable. House prices in London are now 50% above their pre-financial crisis peak in 2007.

Robert Gardner, Nationwide's chief economist, said: "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."