House prices rising at fastest rate for two years

23 November 2006
House prices in England and Wales rose at their fastest annual pace in two years between October and November despite the interest rate hike, according to a survey from property website Rightmove.

The average asking price for a house in England and Wales has leapt by more than 12 per cent over the past year, taking it to £222,333 - £24,478 more than at this time last year, according to the Rightmove house price index.

The price rise between October and November 2006 was 1.5 per cent.

Rightmove attributed rising prices in significant part to a shortage of supply in housing stock.

Last week, the Royal Institution of Chartered Surveyors said the market had seen the steepest rise in prices in four years in October.

Many economists expect a cooling in the market following this month's interest rate hike to five percent, and some even warn of precipitously falling prices.

David Miles, chief UK economist to Morgan Stanley investment bank, has issued a report predicting that "a sharp fall in real house prices is likely at some point in the relatively near future, though it could yet be one to two years away".

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