The annual house price growth in the UK was stable in November at 2.5 per cent, according to Nationwide House Price Index.

The average price of a home in the UK now is £209,988 (not seasonally adjusted) with a month-on-month increase of 0.1 per cent.

Low mortgage rates and healthy rates of employment growth are providing support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence. The lack of homes on the market is providing support to house prices.

Construction of new build properties is still too low – with completions in England over the past 12 months 13 per cent below 2007 levels. But the picture improves significantly if new dwellings that have been created by converting larger homes into more units and those created by ‘change of use’, such as offices transformed into flats, are added.

On this broader measure, the number of dwellings being created each year is now only 3 per cent lower than the levels recorded in 2007 (even after accounting for demolitions). Interestingly, it is ‘change of use’ of buildings – i.e. from shops, offices and other commercial purposes, to homes – which is providing the biggest boost, driven by a shift in government policy.