2006 house price growth hits double figures

Over the last 12 months, the average property owner in the UK saw their asset rise in value by £45 a day as house price inflation defied experts' predictions to reach 10.5 per cent for the year.

The average UK home now costs £173,746, according to new research from Nationwide after prices rose by 1.2 per cent in December, only marginally down from last month's 1.4 per cent growth in spite of the recent interest rate rise.

Commenting on the statistics, Fionnuala Earley, Nationwide's group economist, said: "Both the housing market and weather forecasters were surprised by the warm climate this year.

"The temperate weather is likely to have played only a minor role, but the housing market clearly warmed up during the year. House prices increased three and a half times faster than last year and returned to double digits for the first time since February 2005."

The mortgage lender believes that the growth is down to three key factors: a buoyant economy supported by high levels of employment, stable interest rates and a shortage in supply.

None of these look to be set for an immediate change and so homeowners are more than likely to see their homes carry on accumulating in value in the first few months of 2007.