The first house price index from the Halifax since the Bank of England raised interest rates in November has found the market still strong.
UK house prices are still rising at a figure of 14.1% year on year, it said, down from 16.7% last month, but well above the long term average of 8%.
Chief Economist for the Halifax, Martin Ellis, said: ‘House prices rose 1% during November and are now 14.1% higher than a year ago. The gradual easing in house price growth reflects a market returning to average house price rises after two years of exceptional increases.’
It also emerged that the average homeowner in the UK is currently paying 13.6% of their post tax income to support mortgage payments. The average for this figure over the past 20 years has been 21% of their take home pay.
This figure reached a peak of more than 36% in 1990. For mortgage payments to equal the long term average, bank base rates would have to rise to 6.25% – and for them to reach the peak of 36%, bank base rates would need to rise to 10%.
The Monetary Policy at the Bank of England is beginning its monthly meeting this morning to see whether there is a need to raise interest rates again in December. Their decision will be announced on Thursday.