House prices rocket 7.7% in a year

House prices in the three months to November were up 7.7 per cent year-on-year, according to the latest house price index from Halifax.

The average price of a home in the UK hit £174,910 in November, after prices increased 1.1 per cent between October and November.

Prices have now risen for 10 consecutive months, although the average price is still 12 per cent below the August 2007 peak.

However, housebuilding is on the increase which will ease the pressure on house prices.

The number of private sector housing starts in England increased by 10 per cent between the second and third quarters to 26,380, the highest level since 2008 and up 28 per cent on the third quarter of 2012.

Halifax housing economist Martin Ellis says stronger demand, combined with an insufficient increase in housing supply, has pushed up house prices.

He adds: “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 on the rate of growth of house prices.

“We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms.”