British House Prices Surge in November #

House prices in Britain rose in November at the fastest annual pace since November 2022, highlighting resilience in the property sector amidst higher borrowing costs.

Annual prices increased by 3.7% in November, with a 1.2% rise on a monthly basis, outperforming previous forecasts. Housing market activity maintained a steady pace, as mortgage approvals approached pre-pandemic levels, despite the challenging interest rate environment.

Momentum within the housing market has picked up, further evidenced by data showing lenders approved the highest number of mortgages for house purchases since August 2022. Borrowing costs were reduced last month for the second time in four years, with future rate cuts expected to be gradual.

“The underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease.”

With the economy projected to recover steadily, the housing market is expected to gain further strength. The current government has pledged to reform the planning system to facilitate more construction and has set mandatory targets to accelerate house-building. Despite these measures, the shortage of home supply is anticipated to continue driving up prices over the medium term.