%VIRTUAL-SkimlinksPromo%House prices surged by 7.7% annually in November, marking the fastest rate seen in six years, Halifax has reported.
Halifax said the increase was the biggest seen since October 2007, as strengthened demand in the market combined with a lack of homes for would-be buyers to choose from.
Prices rose by 1.1% month on month to reach £174,910 on average across the UK, in the 10th monthly increase in a row.
But the typical price is still 12% below its 2007 peak, the latest housing market study said.
A new phase of the Government's flagship Help to Buy scheme was launched in October to give more people with low deposits a helping hand on to or up the housing ladder. The scheme offers state-backed loans to people with deposits as low as 5%.
Meanwhile, the Funding for Lending scheme which has been credited with boosting mortgage availability generally is being re-directed away from households to help small businesses.
The number of mortgages on the market has increased by around 40% since Funding for Lending was launched last year.
Yesterday, the Government announced plans for overseas property investors to have to pay the so-called "oligarch tax" when they sell UK properties under plans to cool London's overheated housing market.
Strong house price increases in the English capital have been put down to wealthy foreign investors looking for a safe haven to place their cash.
Martin Ellis, Halifax housing economist, said: " The annual rate of price increase rose again, with prices in the three months to November 7.7% higher than in the same three months last year.
"Stronger demand, combined with an insufficient increase in housing supply, has resulted in increases in house prices accompanying higher activity this year.
"Low interest rates, improvements in consumer confidence and official schemes, such as Funding for Lending and Help to Buy, all appear to have boosted demand.
"However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices."
Mr Ellis said recent signs of a revival in housebuilding should also help bring supply and demand into better balance and help to curb the upward pressure on prices.
Howard Archer, chief European and UK economist for IHS Global Insight, said there is a "mounting danger that house prices could really take off over the coming months".
He said: "T he decision of the Bank of England and the Treasury to end Funding for Lending scheme support for mortgage lending from January looks a highly sensible decision, although in itself it is unlikely to act as a major brake on housing market activity.
"Consequently, the Bank of England may very well have to make good on its statement that it is prepared to take further action to rein in the housing market if prices rise markedly amid ongoing strengthening activity."
They have the power to push a price higher, depending on how many other people are in the running for a home and how liberal they want to be with the truth to the buyers. In some cases, they can also do more harm than good by initially overvaluing a property. The worst case scenario is the home eventually sells for less than it would have done had it been priced realistically in the first place.
Sometimes a quick-moving solicitor can be the difference between getting the home at the price you want and getting into a bidding war or missing out entirely. If the buyer needs a quick sale, they're more likely to do a deal with someone who has a flexible solicitor who can push through the sale so it suits them.
Research by Halifax concluded that anti-social neighbours could take £31,000 off the price of an average home. If you’re selling, you should declare any problems you’ve had on a Seller’s Property Information Form, otherwise you could face a claim later on.
While an increase in Council Tax might not be too much of a deterrent to a potential buyer, plans to grant permission for new homes, a mobile phone mast or wind turbines could knock an asking price down. If you're a buyer, the local council should have details of any future planning applications and you can search them for a small fee.
A lot of traffic in an area obviously has an effect on air quality. Since 1997 each local authority in the UK has carried out studies of the air quality in its area. If an area falls below a national benchmark for air quality, it has to be declared an Air Quality Management Area (AQMA). Some residents of the Llandaff area of Cardiff expressed concern that it had become an AQMA due to an increase in traffic in the area. Whether this becomes a widespread issue remains to be seen.
Mortgage availability is a key driver of property prices. If no-one can take out a mortgage, then prices will stall and eventually fall. We've seen this happen in parts of the UK in recent years, as lenders tightened up their criteria following the credit crunch. Conversely, good mortgage availability will mean more people are competing for properties - to a seller's advantage if their home is desirable.
An outstanding local school can add around 8% to the value of a home, according to the Royal Institution of Chartered Surveyors. On the flipside, a not so good Ofsted report can take off a similar amount. If you’re concerned about a school’s performance, one way to get involved is to become a governor.
Initiatives such as the Help To Buy scheme have been credited with pushing house prices up. A buoyant economy with strong employment gives people the confidence to buy and leads to an upward shift in house prices, while rises in unemployment have the reverse effect. Planning restrictions, at both a national and local government level, affect the number of homes in a particular area.