UK house prices rise in november

The building society’s figures show that values of UK property climbed 0.6 per cent last month from October 2013. The average house price in the UK is now £174,566, 6.5 per cent higher than November 2012 – a faster rate of annual growth than the 5.8 per cent increase recorded in October 2013.

The figures follow a continuing trend of rising house prices across all major indices, with property industry experts concerned that the country is heading towards a housing bubble. The acceleration is described by Nationwide as “surprisingly quick” from the “subdued growth” typically recorded in 2011 and 2012.

Despite the consistent price rises, though, house values are still 6 per cent below the market peak recorded in 2007. Only in London are prices at an all-time high, 8 per cent above the previous peak.

 “Activity in the housing market has picked up strongly in recent months. The number of mortgage approvals for house purchase reached 66,735 in September, 34% higher than the same period of 2012. A large part of the improvement can be attributed to further improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers,” commented Robert Gardner, Nationwide's Chief Economist.

“Policy measures aimed at keeping down the cost and improving the availability of credit are also playing an important role. Indeed, mortgage rates have declined significantly from the already low levels prevailing last year. For example, Bank of England data indicates that the interest rate on two year fixed rate mortgages for those with a 10% deposit has fallen from 5.6% to 4.4% over the past twelve months. For a buyer purchasing the typical UK home over 25 years, this equates to a reduction in monthly payments of around £110 (£1,320 per year) at the current average house price.”