House prices jump in November

House prices across the UK jumped 0.5% in November compared with the same rate in October for the seventh consecutive months, even as year-on-year house price rose between 2.0% and 2.7%, latest data from the Office of National Statistics (ONS) revealed.

Nationwide chief economist Martin Gahbauer, said that the monthly rate of house was unchanged in November and adjusted by some 0.5%. This means that the average price of a property in the UK rose by 2.7% compared with same period last year.

Gahbauer explained that a property valued at £162,764 during the pre-crisis 2006 level, is now at a similar level last month.

“The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8% in September.  This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows,” he said.

At the same time, the economist reported that the labour market is showing better-than-expected performance, although the future remains doubtful.

According to Gahbauer, the country’s housing sector is critically dependent on the labour market conditions. Although latest statistics has shown that the labour market is showing signs of recovery.

As the UK is faced with a very long economic recession not since WWII, many analysts forecast the unemployment rate to dramatically shoot up in 2009, and breach the psychological threshold of three million mark before the end of the year. However, the fear did not materialized as the increase in unemployment was not as bad as earlier predicted.

Figures from the ONS in September showed that the number of unemployed Britons will not reach three million this year.

The Royal Institution of Chartered Surveyors (RICS) released its 2010 housing outlook which said that the housing market would face a number of challenges next year, including the imminent removal of the extended zero rate bank of stamp duty and prospect.

RICS added that the increase in base rates from the current emergency level helped keep the cost of mortgage finance to slump for many homeowners.