Summary:

• Growth puts 300,000-pound average price in sight for 2016
• Prime London market suffers after 2015 property-tax changes

U.K. house prices rose for a 12th straight month in December and may hit an average 300,000 pounds ($433,000) this year if the current rate of growth continues, according to LSL Property Services Plc and Acadata.

Average values rose 0.6 percent last month to a high of 292,077 pounds, the groups said in a report on Thursday. An imbalance between supply and demand is driving price growth, with values jumping 6.6 percent in 2015 as a whole.

“The rising tide of property prices has been propelled so far by a sinking supply of houses coming onto the market, compared with increasing inquiries from potential buyers,” Adrian Gill, director of Reeds Rains and Your Move estate agents, said in the report. “We may subsequently see prices surge further during the first quarter of 2016.”

Nationally, housing transactions totaled 85,000 last month, the highest for a December since 2006. With such demand, LSL and Acadata said, average prices should pass the 300,000-pound level by May.

In the report, LSL and Acadata highlighted 2015 as a good year for homeowners, apart from those with properties in prime London locations. Values in central London fell 8.7 percent last year as higher stamp duty on purchases of the most expensive homes curbed demand.

That tallies with Bloomberg analysis of Land Registry data showing the median sale price of a home in SW1, the London postcode that includes Belgravia and St. James’s, fell by more than a fifth in the 12 months through November.

Source: Bloomberg Business