Lack of new homes could keep UK house prices rising, says Nationwide

House prices are likely to continue to rise in 2016 as building lags demand for homes, the UK’s biggest building society has warned.

The average price of a property in the UK increased by 0.3% in January, and is 4.4% higher than a year ago, Nationwide said.

Robert Gardner, chief economist at the building society, said the pace of growth remained broadly stable, but “the risks are skewed towards a modest acceleration in house price growth”.

He added: “The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.”

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