House prices unexpectedly rose again last month as the mortgage market became more affordable, a closely-watched survey showed.

Property values were up 0.2pc between October and November after making a surprise 0.9pc month-on-month lurch upwards in the previous monthly period, according to the Nationwide house price index.

Analysts had expects prices to fall 0.4pc in November.

It meant the annual fall in house prices reduced from 3.3pc to 2pc, although it is the tenth month in a row that the figure has fallen.

The series of annual falls that began in February leaves the average house price at £258,557.

Nationwide’s chief economist Robert Gardner said the changes were a result of an improved outlook for interest rates next year.

He said: “These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed rate mortgage pricing. 

“If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at c.30pc below pre-pandemic levels.”

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