Figures released by the Halifax have revealed that house prices are continuing on their upwards trajectory, and they're rising at a rapid pace – they showed an increase of 1.1% in November and are up 7.7% over the year, with the average home now costing £174,910.
The rise is thought to be the result of increased demand (fuelled by Help to Buy, lower interest rates and improved consumer confidence) and a distinct lack of properties available on the market, with November being the tenth successive month where prices increased.
But, economists at the bank aren't convinced that such a rapid pace of price rises will be maintained. Household finances are under continuing pressure which could help restrict the growth of house prices, while Chancellor George Osborne's plans to boost housing supply could help balance out the market – and therefore help keep prices under control.
He's announced measures to support the construction industry and encourage councils to make more land available for house building, which could potentially result in 250,000 new homes being built by private developers. This, combined with the reining in of the Funding for Lending Scheme to restrict cheap funding for residential mortgages, should keep the mortgage market at a steady pace rather than overheat it.
In equally as encouraging news, house prices are actually still well below the pre-recession peak – they're 12% lower than the average prices seen during the housing boom in August 2007 – which should keep fears of a housing bubble constrained, while at the same time ensuring those still to get on the property ladder needn't find themselves out-priced by the market.
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