House prices were surprisingly robust in November. A 1.2 percent monthly rise in the Nationwide's index was a full percentage point stronger than market consensus and boosted the annual inflation rate from 2.4 percent to 3.7 percent, more than a 2-year high. Prices are now just 1 percent below their all-time highs recorded in summer 2022.

The 3-monthly change climbed from 0.7 percent to 1.2 percent, underscoring a pick-up in underlying momentum. The labour market remains firm, real earnings growth trending up and mortgage approvals are approaching pre-pandemic levels. All of which bodes well for housing demand. However, affordability is still stretched and while upcoming changes in stamp duty from the Budget may boost activity in early 2025, they are also likely to be a restraining factor later in the year.

More generally, today's unexpectedly strong update lifts the UK's RPI to minus 11 but leaves the RPI-P at a lowly minus 35. Real economic activity is lagging market forecasts by some margin, making for at least a chance of a cut in Bank Rate later this month.

Prices are expected to rise 0.2 percent on the month after surprising on the downside in October.

The Nationwide House Price Index (HPI) provides house price information derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted; that is, they track a representative house price over time rather than the simple average price.

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.

Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.

Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.