Biggest rise in house prices for six years

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House prices surged by 7.7 per cent annually in November, marking the fastest rate seen in six years, according to new Halifax figures.

Halifax said the increase was the biggest recorded since October 2007, as strengthened demand in the market combined with a lack of homes for would-be buyers to choose from.

Prices rose by 1.1 per cent month on month to reach £174,910 on average across the UK, in the 10th monthly increase in a row.

But the typical price is still 12 per cent below its 2007 peak, the latest housing market study said.

A new phase of the Government’s flagship Help to Buy scheme was launched in October to give more people with low deposits a helping hand onto or up the housing ladder. The scheme offers state-backed loans to people with deposits as low as five per cent.

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

The number of mortgages on the market has increased by around 40 per cent since Funding for Lending was launched last year.

Strong house price increases in London have been put down to wealthy foreign investors looking for a safe haven to place their cash.

Halifax housing economist Martin Ellis said: “The annual rate of price increase rose again, with prices in the three months to November 7.7 per cent 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 accompanying higher activity this year. 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.”