House prices have seen a further increase in November, rising by 0.2% month-on-month, Nationwide has found.

The lender's house price index showed that November is the second consecutive month to see rises in house prices, after they increased by 0.9% in October, following a decrease of -0.8% in September.

Year-on-year, house prices have fallen -2%, with the average house price in the UK in November standing at £258,557.

Nationwide said that while house prices remain weak, it is the strongest outturn for nine months.

Chief economist at Nationwide, Robert Gardner, said: “While mortgage rates are unlikely to return to the lows prevailing in the aftermath of the pandemic, modestly lower borrowing costs, together with solid rates of income growth and weak/negative house price growth, should help underpin a modest rise in activity in the quarters ahead.

“Nevertheless, a rapid rebound still appears unlikely. Cost of living pressures are easing, with the rate of inflation now running below the rate of average wage growth, but consumer confidence remains weak, and surveyors continue to report subdued levels of new buyer enquiries.”

Gardner added that while markets are projecting that the next bank rate move will be down, there are still upward risks to interest rates.

However, policymakers have warned it is too early to cut interest rate cuts.

Head of personal finance at Hargreaves Lansdown, Sarah Coles, added: "The slight easing in mortgage rates in recent months has meant a small pick-up in mortgage approvals for purchases on October, which could bring some relief in the coming months. But it’s not likely to be a turning point for the market, because approvals still remain well below pre-pandemic levels.

"As a result, the Office for Budget Responsibility expects things to get worse before they get better. Right now, we don’t have forced sellers in huge numbers, because the predominance of fixed rates mean remortgages are feeding higher rates into the market at glacial pace, and unemployment remains low.

"However, higher rates will keep coming through in the coming months and years. The average interest rate on existing mortgages was 2% in 2021, and according to the Bank of England it’s 3.2% today. The OBR expects it to hit to 5% by 2027 – so there’s still an awful lot of pain left to come. As a result, it thinks house prices will fall 4.7% in 2024."

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