British house prices experienced a sharp rise in November, significantly exceeding expectations, according to mortgage lender Halifax.
Prices climbed by 1.3% in November compared to October, marking the largest monthly increase since June 2022.
This follows an upwardly revised 0.4% rise in October.
The average property price reached a new record of £298,083 ($380,324), far surpassing the 0.2% growth forecast in a Reuters poll.
On an annual basis, house prices grew by 4.8%, the fastest rate in two years.
“Despite these positive trends, many potential buyers and movers still face significant affordability challenges, and buyer confidence may be tested against a changeable economic backdrop,” said Amanda Bryden, head of mortgages at Halifax.
The Bank of England recently reported the highest number of mortgage approvals in October since August 2022.
Although the central bank has cut interest rates twice since August, it has cautioned that future reductions will likely be gradual.
Nationwide, another mortgage lender, also reported strong growth in November, with annual house price increases reaching a two-year high and monthly prices rising by 1.2%.
“The relief that the budget didn’t contain even higher taxes for households and housing has more than offset the rise in mortgage rates and allowed the big gain in prices in November,” said Paul Dales, chief economist at Capital Economics.
Finance Minister Rachel Reeves confirmed in her October budget that the lowered stamp duty tax threshold would expire in March 2025, without extension.
Halifax predicts continued house price growth into next year, though at a slower rate.
Prime Minister Keir Starmer aims to accelerate new home construction, but analysts note that a shortage of available properties is likely to maintain upward pressure on prices.