Halifax says quarterly growth strongest since 2006

House prices in the United Kingdom rose at their fastest quarterly rate for 15 years in the last three months amid a shortage of available properties, according to the Halifax.

The mortgage lender’s latest house price index shows the average house price rose 3.4% to 272,992 for the three months to the end of November. This was higher than for any quarterly period stretching back to late 2006.

Prices also rose 1% month on-month in November, and have now risen for five consecutive months, after a 0.6% drop in June. Prices have risen by £33,816 since the onset of the covid-19 pandemic.

Russell Galley, managing director of Halifax, said: “The performance of the market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition among mortgage providers keeping rates close to historic lows.”

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Annual house price inflation for first-time buyers stands at 9.1% compared to 8.8% for those moving home. Galley said this shows those taking their first step onto the property ladder “are playing an important role in driving activity.”

Tom Bill, head of UK residential research at Knight Frank said: ”The UK housing market has completely ignored the script and powered its way through the end of the stamp duty holiday and furlough scheme.

”Gravity-defying price growth is the result of competitive mortgage rates and tight supply, both of which we expect to reverse next year, increasing downwards pressure on prices. Interest rates may rise more slowly and supply could stutter if the Omicron variant proves to be more serious than the early anecdotal evidence suggests.”

Last week, online listings firm Zoopla predicted that the constraint in supply - which many have said is fuelling house price inflation – should ease in the new year as the market ‘normalises’.”