If you thought house prices were continuing to rise, you'd be right – and new figures show that price growth is starting to pick up even further, surging ahead towards the end of the year.
The latest Nationwide House Price Index shows that annual house price growth rose to 4.5% during December, up from the increase of 3.7% recorded the previous month, and notably, the strongest annual growth rate seen since May this year (4.6%).
Prices also increased on a quarterly basis, rising by 1.4% and marking a 15-month high, being the strongest quarterly growth rate seen since September 2014 (1.7%). Furthermore, improvement was also apparent on a monthly basis: UK house prices rose by 0.8% from November, up from a marginal increase of 0.1% the previous month, and the largest rise seen since April (1%).
Essentially, this all means that house prices are now higher than they were last month, three months and 12 months ago, and by all accounts, they're not showing any signs of slowing down. In fact, the price of a typical UK home now stands at a new record of £196,999, which may not come as welcome news to those struggling to get on the housing ladder.
More to come?
The report noted that house price growth has been fairly consistent during the second half of this year, with general increases of between 3% and 4.5% being "broadly in line with earnings growth and close to the pace we would expect to prevail over the longer term," said Robert Gardner, Nationwide's chief economist.
However, this may mot be the case for the foreseeable future, as despite a base rate rise being on the cards next year, Robert cautioned that house price growth was likely to accelerate in 2016, fuelled by rising buyer sentiment and the ongoing lack of housing supply.
"The main concern is that construction activity will lag behind strengthening demand," explained Gardner, "putting upward pressure on house prices and eventually reducing affordability. Overall, we expect UK house prices to rise by 3-6% over the next 12 months."
Really, this means that it's even more important to be properly prepared if you want to snap up your dream home. Save up as much as possible so you've got a decent chunk to put towards a deposit – the new Help to Buy ISA may be worth considering, as the Government could give you a 25% boost to your savings – and make sure you find the mortgage that's right for you.
Happily, there are plenty of competitive mortgages available to those with a limited deposit, so even though house prices are rising, buying your dream first home could still be within reach.
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