House prices continue to rise in November

House prices increased by 0.6 per cent in November and were 6.5 per cent higher than November 2012, according to Nationwide.

Robert Gardner, chief economist of Nationwide, said activity in the housing market has picked up strongly in recent months.

The number of mortgage approvals for house purchase reached 66,735 in September, 34 per cent more than the same period of 2012, Nationwide reported.

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Mr Gardner said: “A large part of the improvement can be attributed to further improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers.

“Policy measures aimed at keeping down the cost and improving the availability of credit are also playing an important role. Indeed, mortgage rates have declined significantly from the already low levels prevailing last year.

“For example, Bank of England data indicates that the interest rate on two year fixed rate mortgages for those with a 10 per cent deposit has fallen from 5.6 per cent to 4.4 per cent over the last 12 months.

“For a buyer purchasing the typical UK home over 25 years, this equates to a reduction in monthly payments of around £110 (£1,320 per year) at the current average house price.”