01 December 2009 Credits: sky news.com
House Prices Rise As Recovery Pace Slows

House prices rose for the seventh month in a row during November - but by a modest 0.5%, according to building society Nationwide.

The average cost of a home was pushed up to £162,764 - a level last seen in August 2008.

There are signs that the recent pace of the recovery may be moderating though, as the 0.5% rise recorded for October and November is the smallest since prices stopped falling in April.

The three month on three month growth rate, which is generally considered to be a smoother indicator of the underlying trend, also moderated during November to 2.8%, down from 3.5% in October and 3.8% in September.




The latest house price figures come after the Bank of England reported that the number of loans approved for house purchase had increased for the 11th consecutive month in October.

They rose to 57,345, their highest level since March 2008.

A shortage of properties in the market has been identified as being behind a quicker recovery in house prices this year than predicted.

Many economists are predicting a return to price falls during 2010 as more homes are put up for sale.

Nationwide said the housing market remained "crucially dependent" on labour market conditions.

Mr Gahbauer said: "Despite continued uncertainties about the future, the better than expected performance of the labour market has probably contributed to the surprise rebound in house prices this year.

"Together with the fact that mortgage rates have fallen sharply as a result of base rate cuts, this has meant that far fewer borrowers have fallen into arrears than would normally be the case in such a deep recession.

"As such, the downward pressure on house prices from distressed sales has so far been significantly lower than expected."