House price inflation hits double digits

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House price inflation for 2006 hit 10.5% after a fall in supply helped push prices up another 1.2% in December alone, reports Nationwide.

The lender's latest survey of the market suggests prices will rise through 2007 by between 5% to 8%. Latest price increases mean the average house is now worth £173,746, increasing in value by £45 daily, or more than three times as fast as the 2005 rate of £12.50. This time last year Nationwide predicted annual inflation of "in the low single digits". Looking forward, the lenders says the stronger than expected figures over the past month will add fuel to the MPC's fire in terms of its discussions of another possible interest rate hike early next year. Supply remains tight, which is...

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