|M/M % Chg||0.5||0.8||0.1|
|Y/Y % Chg||3.8||4.5||3.7|
House prices were rather more buoyant than expected in December. The new survey from the Nationwide showed prices rising 0.8 percent on the month, their steepest increase since April and large enough to boost the annual rate of inflation by almost a full percentage point to 4.5 percent, an 8-month high.
December's pick-up made for a quarterly HPI gain of 1.4 percent, a tick firmer than in November and the fastest pace since the third quarter of 2014.
The Nationwide indicated that, despite the probability of an increase in borrowing costs at some point, average house prices will still rise 3-6 percent during the course of 2016. However, regional trends will likely continue very mixed with London, which saw a 12.4 percent yearly rise this quarter, again well ahead of areas where employment growth remains subdued.
If correct the Nationwide's forecast means that the UK housing market will pose further problems for monetary policy next year. However, while potentially one trigger for the first hike in Bank Rate, the BoE will at first consider less blunt policy instruments to tackle any overheating issues before initiating an outright monetary tightening.
House price information is derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted that is they track a representative house price over time rather than the simple average price.
Home values affect much in the economy especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.
Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.
Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.
CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.