UK house prices have increased by 3.7% year-on-year in November, jumping from a growth of 2.4% in October, Nationwide has revealed.

The building society’s house price index found that this is the fastest increase since November 2022.

The average house price in the UK stood at £268,144 in November, a monthly increase of 1.2%, compared to 0.1% in October.

Nationwide added that house prices are now just 1% below the all-time high recorded in the summer of 2022.

Chief economist at Nationwide, Robert Gardner, said: "The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-COVID levels.

"The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget announcement.

"Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment."

Looking ahead, Gardner added that gauging the underlying strength of the market will be "more difficult in the coming months".

He said upcoming changes to stamp duty will "provide an incentive for buyers to bring forward house purchases", with transactions set to jump in the first three months of 2025.

However, this is set to result in a "corresponding period of weakness in the three to six months".

Gardner stated: "Providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth."

Head of personal finance at Hargreaves Lansdown, Sarah Coles, concluded: “We’ve seen a pick-up in activity from landlords, who put sales in train before the Budget. They may not have had the capital gains tax blow they were expecting in the speech, but given that the Treasury is still more likely to hike taxes for landlords than to cut them in the next few years, there’s a decent chance many of them have decided to get out anyway, while they know where they stand.

“We might well see activity remain higher in the coming months, as buyers hurry to get in ahead of the end of the stamp duty holiday on 31 March. However, as prices head to just 1% below their peak, and mortgage rates remain relatively high, there’s a growing chance that affordability raises its ugly head again. This could keep a lid on both sales and prices, as it just becomes too big a stretch to get onto the property ladder – or move up it.”

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