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House price growth picks up as 2015 draws to a close says Nationwide Building Society

British house price growth quickened by more than expected in December to hit an eight-month high, according to a survey on Wednesday, another sign of growing momentum in the housing market.

Mortgage lender Nationwide said house prices rose 0.8 percent in December, the strongest monthly increase since April and compared with a 0.1 percent increase in November.

House prices rose 4.5 percent year-on-year, up from a 3.7 percent annual increase in November.

"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," Nationwide chief economist Robert Gardner.

House prices are likely to rise between 3 and 6 percent over the next 12 months, Gardner added.

London again topped the table for house price growth in 2015, with a home costing 12.2 percent more in the fourth quarter than a year earlier.

The average price of a British house now stands at 196,999 pounds ($292,070), Nationwide said.

Howard Archer, chief UK and European economist at IHS Global Insight forecast house price growth of 6% in 2016 supported by continued buyer interest and shortage of available properties as well as healthy wage growth and levels of employment, relatively high consumer confidence and still very low mortgage interest rates.

But he warned that average house prices would "be constrained by more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the probability that interest rates will start rising gradually during 2016".

Further Reading

Property sales fell sharply in November, says HMRC however greater than 2014