House prices grew by 3.4% on a quarterly basis, which was the strongest reading by this measure since 2006.
Prices grew by 8.2% on an annual basis. Momentum was much slower in London, where annual growth was just 1.1%.
Russell Galley, managing director at Halifax, said: “Typical values [are] up by almost £13,000 since June, and more than £20,000 since this time last year. Since the onset of the pandemic in March 2020, and the UK first entering lockdown, house prices have risen by £33,816, which equates to £1,691 per month.
“The performance of the market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition amongst mortgage providers keeping rates close to historic lows. Those taking their first step onto the property ladder are also playing an important role in driving activity, with annual house price inflation for first-time buyers at 9.1% compared to 8.8% for homemovers.”
Galley said there was signs of that the ‘race for space’ seen during the pandemic was reversing as people move back to city centers to return to day-to-day office work. Prices for flats grew at an annual rate of 10.8%, outpacing the 6.6% rise for detached properties.
Halifax’s data comes days after Nationwide reported similar strong momentum, with its data suggesting a 10% annual rise in house prices last month.
Spiraling prices come despite the end of the stamp duty holiday at the end of September, which many observers thought would lead to a cooling of activity and prices.
Guy Gittins, CEO of estate agent Chestertons, said: “We normally see a seasonal market slowdown towards the end of the year but, this November, witnessed a comparably active market instead. Our offices registered a 16% increase in sales vs October, which proves that buyer appetite remains strong.”
Jan Crosby, head of infrastructure, building and construction at KPMG UK, said: “It appears that house price inflation is entrenched, at least until supply chain issues ease and housing stock finally starts to catch up with demand.
“It’s a strong market in which sellers continue to have the whip hand. Available property is selling very quickly, but there remains a disparity between the rising prices and purchasing power, with wage rises outstripped by inflation.”
Continued house price inflation puts more pressure on the Bank of England to raise interest rates, making mortgage borrowing more expensive and theoretically pouring cold water on the red hot market. Banks have already pulled their best mortgage deals from the market in anticipation of a rate rise.
Galley said: “Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation.
“Economic confidence may be also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.”
He added: “We would not expect the current level of house price growth to be sustained next year given that house price to income ratios are already historically high, and household budgets are only likely to come under greater pressure in the coming months.”