Londoners to pay half mln pounds for new homes in 2016: report

Average house prices in London could skyrocket towards the half-a-million-pound mark (about 740,000 U.S. dollars) for the first time in 2016, even if the pace of rising property values in the British capital's property market slows down.

Property analysts have been number-crunching to predict what will happen to house prices across Britain in the new year, with the consensus being an average rise of six percent.

End-of-year figures from Nationwide, one of Britain's biggest mortgage lenders, revealed the average price in London at the close of 2015 reached 456,229 British pounds, a year-on-year increase of 12.2 percent.

That compares with Nationwide's average price across Britain which reached 197,000 pounds, a year-on-year rise of 4.5 percent.

London was the top performing area for price rises in Britain for the fifth year running.

Nationwide said that if the capital city were to reach the 12.2 percent rise of 2015 in 2016, prices would hit an average 512,000 pounds.

Robert Gardner, Nationwide's chief economist, said: "Prices in the south of England, and especially in London, have been outpacing the rest of the UK by a wide margin. Indeed, prices in the south of England are now well above their pre-crisis levels while they remain below in Scotland, Wales and large parts of the north of England."

"With affordability metrics in the capital stretched by historic standards, another year of above-average price gains appears unlikely," the economist said.

If the predicted average six percent rise in 2016 applied to London, it would mean the average cost of a house would ring in at around 484,000 pounds.

The cheapest area in Britain to buy a house in 2015 was the north of England, with an average cost of 124,167 pounds, with Scotland the only part of Britain to see property values drop during 2015, with an average price of 139,801 pounds, almost two percent lower year-on-year.

Longer term, the price boom could see house prices in London heading towards an average million pounds by 2025.

The National Association of Estate Agents has predicted that the average price of a home in Britain by 2025 will be 419,000 pounds, with London homes on average costing 931,000 pounds. (1 pound = 1.48 U.S. dollars) Endit