Above:The average price of property in the UK has risen to £196,999, a 4.5% increase year-on-year, following a strong market showing in December.

Summary:

• Property prices in the UK rose by 0.8% in December, resulting in 4.5% year-on-year growth in 2015
• High demand is outstripping supply across the UK, with the number of new builds falling for the 15th time in 16 months
• Regions with higher rates of employment, such as Manchester, are experiencing stronger house price growth

UK property prices increased by 0.8% month-on-month in December and 4.5% on the year, reaching an average of £196,999.

The report by Nationwide showed that the increase seen in December was the strongest monthly rise since April, leaping from a 0.1% rise in November. Interest in properties has been sustained thanks to increased earnings growth, high and rising employment, elevated consumer confidence and low mortgage rates.

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.”

Regions with higher rates of employment see significantly stronger house price appreciation and this is evident in Manchester, a city that created jobs at a faster rate in 2015 than London, offering some of the highest yields in the UK.

The latest survey from the Royal Institution of Chartered Surveyors (RICS) reported that new instructions fell for the 15th time in 16 months in November. The lack of supply, which is failing to keep up with high demand, has seen house price growth projected to reach 6% in 2016.

Source:Select Property