According to the Nationwide Building Society, UK house prices rose for a seventh month in November. The average cost of a home increased 0.5% to £162,764, the mortgage lender said in a statement, although home values are still 13% lower than at their peak in October 2007.

The recent pick up in house prices is based on fragile economic fundamentals such as a weak pound, which has driven overseas demand and a boost from the stock market recovery. In addition, the shortage of quality residential stock has aided this somewhat unexpected increase.

There are signs that the upward trend is slowing. The three month on three month growth rate, which is generally considered to be a smoother indicator of the underlying trend, also moderated to 2.8% in November, down from 3.5% in October and 3.8% in September. House prices though could end up being 5% higher than they were at the end of 2008 if December prices remained roughly the same.