Annual house price inflation rose again in November, bringing the annual change to 9.6%, according to the latest survey by the Halifax out today.

November’s 1.7% increase brought average house prices to just a little short of £188,000.

However, the bank said that whilst the UK economy had now recorded 57 successive quarters of growth, signs of cooling in house price inflation were in the air.

Martin Ellis, Halifax chief economist said: “The marked slowing in real average earnings growth over the past six months, and a squeeze on households' discretionary income due to the substantial increase in utility bills during the last year, should temper housing demand.” 

“As a result, we expect house price inflation to ease over the coming months."

Confidence

The latest RICS survey reported a fall in surveyors' confidence in the outlook for house sales for the third successive month and buyer enquiries are below the levels seen between May and August.  The House Builders' Federation reported an annual fall in the numbers looking at new homes for the third successive month in October, indicating a weakening in demand at the initial stages of the house-buying process.

Interest rates are the highest for five years

Official interest rates are at their highest level for five years following last month's increase to 5.0%.  An increasing number of mortgage lenders have also recently withdrawn their best fixed rate deals as a result of higher money market interest rates. 

'Real' average earnings growth has slowed markedly over the past six months.  This slowdown in real earnings growth, together with a squeeze on households' discretionary income resulting from the substantial increase in utility bills over the past year, should temper housing demand.  In turn, house price inflation should ease over the coming months.