UK house prices rise for third month in a row

UK house prices have risen slightly for the third month in a row, according to Nationwide Building Society. This is due to hopes of lower mortgage costs and increased wages boosting demand in the property market.

House prices went up by 0.2% last month compared to October, as revealed by Nationwide's monthly House Price Index.

Property values were 2% lower in November than a year ago, which is less of a decline than the 3.3% seen in October. The average cost of a property across the UK was £258,557 in November.

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Robert Gardner, Nationwide's chief economist, said the year-on-year fall in house prices remains "weak" but is the "strongest outturn in nine months".

He added: "There has been a significant change in market expectations for the future path of bank rate in recent months which, if sustained, could provide much needed support for housing market activity."

Last month, Bank of England policymakers decided to keep interest rates at 5.25%, raising hopes that borrowing costs may have peaked and will start to decrease in the coming year.

This shift in expectations is crucial as it has led to a drop in longer-term interest rates, known as swap rates, which are key to mortgage pricing.

"If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at around 30% below pre-pandemic levels," Mr Gardner said.

Modestly lower borrowing costs coupled with rising wages and falling or slower house prices should help prompt an uplift in activity in the housing