Average UK house price edges toward £200,000, according to Nationwide


House prices increased by 0.3% month-on-month in January and the pace of price growth is poised to pick up further in the coming months, Nationwide Building Society has reported.

The increase took the average house price across the UK to £196,829.

Property values are 4.4% higher than they were a year ago, which is slightly lower than the 4.5% annual growth recorded in December. 

Robert Gardner, Nationwide's chief economist, said that the annual pace of house price growth has remained within "a fairly narrow range" of between 3% and 5% since the summer of 2015.

He said: "As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level.

"The labour market appears to have significant forward momentum. Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace.

"With this trend expected to continue and with interest rates also likely to stay on hold for longer than previously anticipated, the demand for homes is likely to strengthen in the months ahead."

Mr Gardner said that with the supply of homes on the market still tight, the concern remains that house building activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.

He continued: "Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents' books remains close to all-time lows."