Annual UK house prices rise by 6.5% - fastest growth since 2010

UK house prices surged by 6.5% year-on-year in November, Nationwide has reported.

The increase is the fastest annual increase seen since July 2010.

The latest monthly increase of 0.6% has taken the average UK house value to £174,566.

The news comes as the Bank of England yesterday said its Funding for Lending scheme (FLS) would no longer support mortgage borrowing from January as mortgage approvals have hit their highest level since February 2008.

The rise in prices has prompted fears of a property bubble with numerous reports suggesting that demand for homes is outstripping supply.

The capital has seen a strong demand this year with latest Land Registry figures showing that house prices in London were up by 8.7% year-on-year in October.

Nationwide’s chief economist, Robert Gardner, attributed the increase in house prices to improved confidence in the economy.

“Activity in the housing market has picked up strongly in recent months,” said Gardner.

“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.

“Policy measures aimed at keeping down the cost and improving the availability of credit are also playing an important role.”

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