House prices rose once again in November, resulting in an extra £7,000 added to the value of an average property this year alone, new figures suggest.
The average price is now £226,821, £7,080 or 3.2 per cent higher than January this year, according to the latest Halifax house price figures.
Prices over the last three months were 2.4 per cent higher than the previous quarter. This marks the fastest price growth on this measure since the beginning of the year.
Demand continues to outstrip demand, pushing up prices, according to Halifax.
The lender added that given this situation is unlikely to change any time soon, prices are likely to remain robust in the near future.
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However, further ahead, affordability issues could cause price growth to cool down as there simply won’t be the buyers able to pay the increased prices, especially since wage growth remains stagnant.
Russell Galley, Managing Director, Halifax Community Bank, said: ‘Further ahead, increasing affordability issues, as price increases continue to outstrip wage growth, are likely to curb housing demand and cause price growth to ease.
‘We do expect the Government’s first-time buyer Stamp Duty changes to provide some stimulus to demand, particularly in London and the South East where the impact is greatest.’
Prices rose by an extra 0.5 per cent between October and November alone. Following on the heels of a 0.3 per cent rise in October, last month’s increase marked the fifth consecutive monthly rise.
The latest house prices increases mean that the value of Britain’s homes is now estimated at £6trillion. This is a 48 per cent increase over the past decade, from £4.1trillion in 2007.
The number of homes for sale has been dwindling, putting pressure on prices
The increase amounts to almost £70,000 per household in the owner occupied and private rented sectors.
While generally good news for homeowners, the extraordinary increases mean homeownership is even less attainable for those trying to get on the property ladder.
Out of reach? Houses are becoming increasingly unaffordable for those not yet on the ladder
The figures come as new research from L&C Mortgages suggests that the average deposit needed by a first-time buyer could rise to more than £80,000 over the next ten years.
The average deposit currently stands at £51,821, it said.
As residential property continues to become more valuable, rising numbers in England are changing other types of building, such as shops and offices, into homes, Nationwide suggested last week.
On the rise: Prices have been growing gradually most months this year
Completions in England over the past 12 months were about 13 per cent below 2007 levels, but once ‘change of use’ properties are included, the number of completions is only 3 per cent lower than ten years ago, it said.
‘Interestingly, it is “change of use” of buildings – i.e. from shops, offices and other commercial purposes, to homes – which is providing the biggest boost, driven by a shift in government policy,’ Robert Gardner, Nationwide’s chief economist said.
‘From 2014, automatic permitted development rights were granted to convert offices into residential properties.’