UK House Prices Hit Record in November

U.K. house prices hit a record in November, with values over the past three months rising at their fastest pace for 15 years, according to mortgage lender Halifax.

The average price of a home stood at £272,992 after gaining 3.4% in the quarter through November, the fastest pace since late 2006, the mortgage lender said in a report published Tuesday.

Prices rose 1% in November alone -- a fifth monthly increase -- and were up 8.2% from a year earlier.

The average property has gained more than £20,000 over the past year. A typical home in the U.K. has gained more than 8% over the past year. Halifax attributed the increase to shortage of available properties, a strong labour market and keen competition keeping mortgage rates close to historic lows.

But it warned that momentum is likely slow, given stretched affordability and the prospect of Bank of England interest-rate increases. Commentators do not expect the current level of house price growth to be sustained next year given that house price to income ratios are already historically high, and household budgets are only likely to come under greater pressure in the coming month.

The emergence of the omicron variant of Covid-19 could also dent economic confidence, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.

Wales remained the strongest performing region of the U.K., where property prices broke through the £200,000 mark after a near 15% gain over the past year. Values in London rose just 1.1%, reflecting pandemic-driven demand for more spacious homes away from city centres.