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Fastest rise in house prices for six years

HOUSE prices were 7.7% higher in November than a year ago, the fastest rise seen in six years, according to the Halifax.

The bank said the increase was the biggest seen since October 2007, as strengthened demand combined with a lack of homes for buyers.

Prices rose by 1.1% month-on-month to reach £174,910 on average across the UK, the 10th monthly increase in a row. But the typical price is still 12% below its 2007 peak, the latest market study said.

Halifax housing economist Martin Ellis said: "The annual rate of price-increase rose again, with prices in the three months to November 7.7% higher than in the same three months last year.

"Stronger demand, combined with an insufficient increase in housing supply, has resulted in increases in house-prices …Low interest rates, improvements in consumer confidence and official schemes, such as Funding for Lending and Help to Buy, all appear to have boosted demand.

"However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint."

Mr Ellis said recent signs of a revival in housebuilding should also help bring supply and demand into better balance and curb upward pressure on prices.

A new phase of the Government flagship Help to Buy scheme was launched last monthto give more people with low deposits help on the housing ladder.

Meanwhile, the Funding for Lending scheme, credited with boosting mortgage availability, is being re-directed away from households to help small firms.

The number of mortgages on the market has increased by 40% since the scheme was launched last year.

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