LONDON (Dec 6): Britain's property sector gathered more pace in November, with house prices rising by a faster-than-expected 1.3% in November from October to hit a record high, mortgage lender Halifax said on Friday, but affordability challenges remain.

The increase was well above a 0.2% rise on the month predicted by a Reuters poll of economists and it was the highest increase so far this year, Halifax said. The annual growth rate rose by 4.8%, the most in two-years.

Both the monthly and annual figures were above all estimates in a Reuters poll of economists.

Amanda Bryden, head of mortgages at Halifax, said while demand for mortgages and borrowing costs had improved, buyers and movers still faced significant challenges.

"Despite these positive trends, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop," she said.

The Bank of England said last week that lenders approved the most mortgages for house purchases since August 2022.

The BOE cut interest rates last month for the second time since August but it has cautioned that future reductions are likely to be gradual.

On Monday, rival mortgage lender Nationwide said its measure of British house prices rose at the fastest annual pace in two years in November.

Halifax expects prices to continue to grow next year, although at a slower pace due to interest rates.

"As we move towards the end of the year and into 2025, positive employment figures and anticipated decreases in interest rates are expected to continue supporting demand," Bryden said.

"This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago."

Prime Minister Keir Starmer is seeking to speed up construction of new homes but analysts say a shortage of properties for sale is likely to keep upward pressure on prices for at least the short term.

Uploaded by Magessan Varatharaja