According to the Halifax, house prices rose again in November. A 0.5 percent monthly gain was almost double the market consensus and followed a slightly larger revised 1.2 percent bounce in October. The increase lifted the average price to £283,615, a 4-month high and around £40,000 above its pre-Covid mark. Prices are now just 1.0 percent lower on the year.

The quarterly change, the best guide to underlying developments, stands at minus 0.7 percent, up from minus 1.9 percent in the three months to October and also a 4-month peak. However, the Halifax pointed out that the partial recovery was more due to a lack of supply rather than a significant increase in demand, although the latter has strengthened slightly in recent months. Falling mortgage rates have probably provided a modest boost but the lender still expects weak overall economic conditions to weigh on prices moving into 2024.

More generally, today's update boosts the UK RPI to 41 and the RPI-P to a very solid 45. Both measures show overall economic activity running well ahead of market expectations, a factor likely to reinforce the general BoE MPC view that for now, interest rate cuts are not on the table.

Prices are expected to rise a monthly 0.3 percent after a 1.1 percent increase in October.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.