Halifax index shows 8.5% increase in price of UK homes since April low point

UK house prices increased by 1.4% in November, according to the Halifax – the fifth monthly rise in a row.

It said that prices have increased 8.5% since their low point in April, and 4.2% during 2009 overall. However, they are still 1.6% lower than a year ago.

The lender's latest survey shows that price of the average UK home has now recovered to £167,664.

Halifax attributed the house price recovery largely to a shortage of properties for sale, combined with a small rise in demand due to improvements in affordability.

“The recovery in house prices since the spring has been driven by increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers who can raise the necessary deposit,” said Halifax economist Martin Ellis.

He predicted that prices would be unlikely to rise much further during 2010, as price movement would largely depend on whether the supply of homes for sale increased.