November sees fastest house price rises in two years says Nationwide 

November figures from the building society Nationwide reveal that annual house prices have risen at their fastest rate in two years despite pressure on incomes.

Data from the lender puts annual growth at 3.7% in November, an increase on October’s 2.4% figure, making it the fastest rate of growth since November 2022.

Month on month prices rose by 1.2%, the largest increase since March 2022. In addition, figures show mortgage approvals in October were at their highest level since August 2022, suggesting demand remains robust.

Low interest rates, and the race for space following the pandemic, saw house prices reach a peak in 2022. Two years on, the cost of borrowing is much more steep – the Bank of England has cut interest rates twice this year, but its rate still stands at 4.75 per cent. Commentators are therefore speculating about how high demand is being sustained.

According to Robert Gardner, Nationwide’s chief economist: “The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.”

Changes to stamp duty thresholds from April, which were announced in October’s budget, may provide one answer, as buyers seek to complete before the change takes effect. The labour market is also strong, meaning incomes are offsetting higher prices.

Robert Gardner added: “Providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”

Read more about this story in the Guardian.