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UK house prices rose by 9.5% in 2015

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The average price of a UK property increased by 9.5% over the course of 2015, and is set to continue rising in the months ahead, the latest figures from Halifax suggest.

According to the lender, which is the UK’s largest mortgage provider, house prices rose at their fastest rate since 2006, with the cost of buying the average home standing at £208,286 at the end of December.

This is compared to £189,428 in December 2014, and means that prices rose on a monthly, quarterly and annual basis in the month of December.

Property values were up by 1.7% compared with November, and 1.6% in October to December, compared with the three months to November.

Sales on the rise

The report also revealed that house sales across the UK increased significantly towards the end of 2015, with transactions between September to November being 5.2% higher than in the same three months in 2014.

Sales were also 1.4% higher than in the preceding three months, according to seasonally adjusted figures from HMRC.

Figures from the Bank of England also reveal that mortgage approvals are on a steady upward trend and gained traction late last year.

The volume of mortgage approvals for house purchases – which is a leading indicator of completed house sales - increased by 1% between October and November.

Approvals in the quarter to November were 1% higher than in the preceding three months and 16% higher than in the same three months a year earlier due to improving market conditions.

Halifax housing economist Martin Ellis, said the figures do suggest a marginal slowdown in growth, but indicated that this is unlikely to be reversed in the months ahead

"House prices in the three months to December were 1.6% higher than in the previous three months. This was the second successive month that this measure has been below 2.0%, indicating a possible slight softening in the underlying rate of price growth.”

Contrasting figures

It comes after figures from Nationwide revealed a more modest yet still substantial increase in property values across 2015.

According to the building society’s House Price Index, values rose by 4.5% last year, which took the average UK house price to £196,999.

Property values also increased on a monthly basis, from an average of £196,305 recorded in November.

Robert Gardner, Nationwide's chief economist, said that price increases were broadly in line with earnings growth and close to the pace that would be expected to prevail over the longer term.

“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.”

Mr Gardner expects further healthy gains in employment and rising wages to bolster buyer sentiment, with borrowing costs only expected to rise gradually.

Overall, Nationwide anticipates UK house prices to rise by between 3% and 6% over 2016 as the growth trend continues – largely in line with recent predictions from The Royal Institution of Chartered Surveyors.