House prices shoot up but still 12% below peak values

House prices shoot up but still 12% below peak values

House prices rose 7.7% across the UK, the Halifax has said, reporting on the year to November.

The lender puts the average house price for last month at £174,910, up 1.1% on October.

According to the Halifax, house prices have now been rising for ten consecutive months.

However, it also says that the average price is still 12% below the August 2007 peak.

The Halifax’s latest house price index is, however, at odds with official figures.

The Office for Budget Responsibility says that house prices will rise 3.2% this year – less than half what the Halifax says has already happened.

The Halifax suggests there is no housing bubble, while the OBR says that its (lower) figures show there is a danger of boom and bust, and that an overheating housing market could destabilise Britain’s economic recovery.

The OBR is also projecting a 5.3% rise in house prices next year, followed by a 7.2% rise in 2015.

The OBR’s figures were published alongside last week’s Autumn Statement.

* Is Help to Buy the politicians’ equivalent of a “selfie”? Will it do the housing market any favours at all? And why has the Bank of England done an about-face on whether a housing bubble could be on the cards?

See today’s insightful blog by Mark Riddick.