UK House Prices Surge in November, Market Gains Momentum
LONDON (Reuters) -British house prices jumped in November by much more than expected, adding to signs of a strengthening property market mortgage lender Halifax said on Friday, but it warned that affordability challenges for buyers remain.
House prices rose by 1.3% in monthly terms in November after an upwardly revised 0.4% increase in October to reach a new record of 298,083 pounds ($380,324) - well above a 0.2% rise predicted by economists in a Reuters poll.
It was the biggest increase since June 2022.
House prices rose in annual terms by 4.8%, the most in two-years.
"Despite these positive trends, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop," Amanda Bryden, head of mortgages at Halifax, said.
The Bank of England said last week that lenders in October approved the most mortgages for house purchases since August 2022.
The central bank cut interest rates last month for the second time since August but it has cautioned that future reductions are likely to be gradual.
On Monday, mortgage lender Nationwide said house prices rose at the fastest annual pace in two years in November, while monthly prices jumped 1.2%.
"The relief that the budget didn't contain even higher taxes for households and housing has more than offset the rise in mortgage rates and allowed the big gain in prices in November," Paul Dales, chief economist at Capital Economics, said.
Finance minister Rachel Reeves said in her Oct. 30 budget that she would not extend a lowering of the threshold at which stamp duty tax is paid on homes beyond its expiry in March 2025.
Halifax expects prices to continue to grow next year, although at a slower pace.
Prime Minister Keir Starmer wants to speed up construction of new homes but analysts say a shortage of properties for sale is likely to keep upward pressure on prices.
($1 = 0.7838 pounds)
(Reporting by Suban Abdulla; Additional reporting by William Schomberg; Editing by Kate Holton)
