UK house price inflation continues

The rate of house price growth increased in November last year, new government figures have revealed.

According to the Department for Communities and Local Government, annual house price inflation in the UK rose from 8.6 per cent in October to 8.9 per cent the following month.

Prices rose at their fastest rate in Northern Ireland, going up by 36.6 per cent in the year up to November, more than four times the national average.

This means that the average house price in the UK in November 2006 stood at £199,467, up from £197,987 a month earlier.

Howard Archer, chief economist at Global Insight, said that the "ongoing buoyancy" of house prices was probably a contributory factor in the Bank of England's recent decision to raise interest rates to 5.25 per cent.

"If house prices continue to post sharp rises over the coming months, it will increase the chances of interest rates rising even higher," he added.

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