House prices rose by 1.4 per cent in November, the fifth consecutive monthly rise according to the Halifax house price index.
The average house price is now 4.2 per cent higher than the start of the year but Halifax warned house prices are likely to be flat during 2010.
“Somewhat higher demand has combined with a low level of properties available for sale to push up prices. Further ahead, the prospects for the market will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale,” said Martin Ellis, housing economist at Halifax.
Prices between September to November were 3.7 per cent higher than in the previous three months. Halifax said this is the biggest increase on a three monthly basis since November 2006.
But house prices in November were still 1.6 per cent lower on an annual basis.
Ellis said: “The recovery in house prices since the spring has been driven by increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers who can raise the necessary deposit.”
According to Halifax, house prices had declined 23 per cent between August 2007 and April 2009.
James Hyman, partner for residential sales at Cluttons, said he expected to see a fall in house prices early next year.
“Halifax’s figures suggest sellers are still in the driving seat, as the stock of property for sale remains extremely limited, forcing prices upwards.
“I expect to see this change rapidly in the New Year as people who have held off selling over the past year or so are encouraged to come to market by rising prices, which could in turn bring about a second dip in property values.”
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