The Halifax data shows house prices are up 1.4% on the quarter despite a fall last month and is expected to rise strongly.

House prices have increased 9.0% over the last year from £188,058 a year ago to an average price for a home of £204,552.

Even though house prices decreased by 0.2% in November over the fourth quarter average UK prices remained higher by 1.4% and this was the smallest rise since December 2014.

The strong rise in house prices over the last year means first time buyers would require a larger deposit or higher earnings to purchase their first home.

Demand for property remains high

According to Martin Ellis, Halifax housing economist, solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year.

There is also an imbalance between supply and demand driving prices higher and this situation will not reverse in the short term.

In August 2015 the UK housing stock was estimated to be £5.1 trillion before deducting mortgages balances compared to only £3.3 trillion in 2005 an increase of 53% or £1.8 trillion.

This is an average increase of £76,316 per household and for remortgage buyers this gives them an opportunity to release capital which can be use to improve their home.

For home movers the gap between their current home and the next increases which means they need a larger mortgage.

Mortgage rates decline further

The Bank of England have reported a fall in the average cost of mortgages as interest on fixed rate mortgages have declined 0.07% in the third quarter to 2.79%.

Rates have reduced from 3.43% last year and are now the lowest rate since the Bank of England's records began in 2007 when fixed rate mortgages were at 5.35%.

Fixed interest mortgages remain the most popular selected by 80% of first time buyers, home movers and remortgage buyers in the third quarter. This has increased from only 59% back in 2008.

For older equity release mortgage buyers, fixed rates can typically be secure from interest rates of 5.8% upwards without any evidence of earnings which is important for borrowers with only pension income.

The volume of mortgage approvals increased by 1% from September to October and was 17% higher than October 2014.

Over three months mortgage approvals were 4.0% higher than the preceding three months with UK home sales higher by 4.7% with 105,490 homes sold from September to October.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to improve your quality of life or gift to a family member or friend.

Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.