House prices grow at fastest rate in over a year as supply hits record low

This was the highest increase in prices in the last year

Most people think house prices will continue to rise (Getty Images)

More good news for homeowners from Halifax, which has said that house prices in the three months to October were 9.7 per cent higher than they were in the same three months in 2014.

That means the average price for a house is now £205,240 in the UK, up 1.1 per cent from September and 2.8 per cent on the three months to July, beating expectations.

This was the highest increase in prices in the last year. Optimism remains high that house prices continue to rise, with over two-thirds of those surveyed in Halifax's confidence tracker believing house prices will rise again in 12 months' time.

The news will dismay first-time buyers who have to battle dwindling availability of housing as housebuilders fail to refresh supply.

Russell Quirk, founder and CEO of eMoov.co.uk, said that cheap mortgages were behind rising prices.

"There is no doubt that the main driving factors behind this uplift are the abundance of more affordable mortgage products on the market, as well as the continuous elephant in the room of a general lack of housing in Britain, affordable or otherwise," Quirk said.

He warned that buyers could be tempted to borrow more than they would in normal circumstaces to get on the market. "Should interest rates jump up, they could find themselves in a difficult situation financially," Quirk said.

In a separate report, GoCompare.com found that the average salary in the UK is less than half the average salary needed to get on the property ladder.

In 51 out of the 65 cities included in this research, the average salary is below the minimum required to buy a property. Unsurprisingly, London is the worst offender. Researched showed first time buyers needed an annual income of £140,000 to afford a home in London - where the average income is £30,000.