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House prices continue to increase

Average house prices across the UK continued to increase last month, new figures from Nationwide Building Society revealed.According to the organisation's monthly house price update, values grew by 0.6 per cent from October to £174,556 on average - up by 6.5 per cent year-on-year.Moreover, UK home valuations are now just six per cent lower than they were at their peak in 2007, prior to the housing market crash and global economic downturn.Robert Gardner, chief economist at Nationwide, commented: "A large part of the improvement can be attributed to further improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers."He added the number of mortgage approvals for house purchases up and down the country reached 66,735 in September - 34 per cent higher than in the same month last year - and mortgage interest rates have also become more affordable over the last year.Overall, data from the Bank of England has shown average interest rates on a two-year fixed rate mortgage for a borrower with ten per cent equity have come down from 5.6 to 4.4 per cent in the last 12 months.This equates to savings of around £110 a month for borrowers on a 25-year deal and represents a significant reduction in mortgage expenses for many Brits.Responding to the results, Ian McGrail, managing director of FirstMortgage, told Property Wire that the improvements witnessed across the housing sector over recent months are indicative of the economy coming out of recession and into a prolonged period of recovery, which is benefiting both buyers and sellers at present."Whilst many are panicking about a property bubble, this growth shows we are returning to normal, as schemes such as Help To Buy are beginning to influence not only purchasing activity but are also having a positive influence on prices," he concluded. 

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