01.12.202111:02:00UTC+00UK House Price Inflation Accelerates Unexpectedly

UK house prices rose at a faster pace in November, defying expectations for an easing, survey results from the Nationwide Building Society showed Wednesday.

The house price index rose 10.0 percent year-on-year following a 9.9 percent increase in October. Economists had forecast a 9.3 percent climb.

Compared to the previous month, house prices rose 0.9 percent in November after a 0.7 percent climb in October. Economists had predicted a slower growth of 0.5 percent. The monthly increase was the fastest in three months.

House prices are now almost 15 percent above the level prevailing in March last year when the pandemic struck the UK, Nationwide Chief Economist Robert Gardner said.

The housing market has shown signs of cooling in recent months, while the underlying activity seems to be holding up well, Nationwide said.

"But the outlook remains uncertain, where a number of factors suggest the pace of activity may slow," Gardner said.

The impact the new 'Omicron' variant of coronavirus on the wider economy remains unclear, the economist noted.

"Even if economic conditions continue to improve, rising interest rates may exert a cooling influence on the market," Gardner said.

House price growth has been out-pacing income growth by a significant margin and, as a result, housing affordability is already less favorable than was the case before the pandemic struck, the economist added.