Nationwide Building SocietyHouse prices continue to rise rapidly according to the UK’s largest building society.

The latest Nationwide House Price Index, released today, shows prices rose in October by 1% and are up 5.8% on this time last year.

According to the survey the average house price in the UK now sits at £173,678, 7% below their peak in 2007.

The figures show all parts of the UK saw a rise in house prices over the past three months, led though by London, which saw the biggest increase of 10% over the past year.

More resilient housing market

Reacting to the figures, Robert Gardner, Chief Economist at the Nationwide, said: “The UK housing market appears to be following the more resilient upward trend evident in the wider economy in recent quarters. House prices increased by 1% over the month in October, maintaining the momentum that has been building in the second half of 2013. After averaging less than 1% in the first half of the year, the annual pace of house price growth accelerated to 5.8% in October from 5% the previous month.”

Gardener continued: “The ability and willingness of potential buyers to transact has been steadily increasing. The ability to buy has been supported by continued gains in employment and policy measures such as the Help to Buy and Funding for Lending schemes which have improved the availability and lowered the cost of credit. Mortgage rates are close to all time lows.”

“House price growth has accelerated as buyer demand has picked up more quickly than the supply of new homes. The risk is that if demand continues to strengthen while the supply of property remains constrained affordability could become stretched. Indeed, average wages have continued to decline in real terms even though employment growth has been fairly robust in recent years.”

“Nevertheless, while house price growth has picked up, at a national level prices remain around 7% below their 2007vpeak. Moreover, typical mortgage servicing costs remain modest by historic standards thanks to the ultra-low level of interest rates. A typical mortgage payment for a first time buyer is currently equal to around 29% of take home pay, in line with the long term average.” (Source: Nationwide)

The Nationwide is the first of the major house price surveys to report their figures for October, time will tell whether the Halifax and Land Registry show similar price rises.