On a monthly basis, average house prices increased by 0.2% between October and November 2014.
The figures confirmed that house prices "continued to increase strongly" across the majority of the UK, with prices in London again showing the highest growth at 15.3%.
Excluding London and the South East, UK house prices increased by 7.1% in the 12 months to November 2014.
In November, prices paid by first-time buyers were 11.0% higher on average than in November 2013. For existing owners, prices increased by 9.5% for the same period.
Brian Murphy, Head of Lending at Mortgage Advice Bureau, said:
“A frantic start to 2014 drove the strong annual growth in the latest ONS House Price Index. However, the rate of increase slowed significantly towards the end of last year and November’s average house price was 1% below August’s peak of £274,000. This slight slowing of activity will be especially welcomed by first time buyers, who have also had their hopes lifted by Stamp Duty adjustments – benefitting those towards the bottom of the property ladder.
“Consumer demand in the housing market is expected to remain strong this year, although a slower rate of growth is likely as uncertainties around the general election and interest rates remain. However, with UK inflation falling to 0.5% today – matching the record low last set in May 2000 – a Bank Rate rise may still be some way off. This is more good news for mortgage borrowers, who are already benefiting from historically low pricing and products such as Barclay’s lowest ever 10-year fix which can arm them against future rate rises.
“Market conditions have rarely been so favourable for potential buyers, but while low inflation often signals that supply is exceeding demand for goods and services, the opposite is true in the housing market: there is still a chronic shortage of new homes. Correcting this imbalance must be a key focus for the government and industry to improve affordability and avoid pricing out buyers with lower deposits.”
Mark Williams, Business Line Manager for Inheritance Tax at Octopus Investments, said:
“While the data released today from the ONS show there was no increase in the average house price in November compared with the previous month, the fact remains that the price of property in the UK continues to rise significantly year-on-year.
"UK house prices have increased by 10.0% in the year to November 2014. The nil-rate band for inheritance tax was set at £325,000 in April 2009, when the average house price in the UK was £188,000 and yet since then house prices have risen by 44.1%.
"According to the latest figures, the amount of inheritance tax paid by UK families in 2013-14 rose by 8.6% compared with the previous year. More and more people are facing inheritance tax liability thanks to rising house prices, making it an increasingly mainstream tax problem."
