Annual UK House Price Growth 'Hits 6.5%' The rate of annual house price growth accelerated to 6.5% in November, its fastest pace since July 2010 according to Nationwide. The monthly survey suggested prices have now risen every month for the last year but the surge could now be threatened after the Bank of England confirmed on Thursday that its Funding for Lending Scheme (FLS) would no longer support mortgage borrowing from January. Nationwide said the latest monthly house price increase of 0.6% took average UK values to £174,566 from £173,678 in October. Its chief economist Robert Gardner said it was important to point out that prices were still around 6% below their 2007 peak. He said: "Activity in the housing market has picked up strongly in recent months. The number of mortgage approvals for house purchase reached 66,735 in September, 34% higher than the same period of 2012. A large part of the improvement can be attributed to further improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers. A shortage of property on the market and incentives to help borrowers under Government schemes such as Help to Buy have been cited as reasons for national price growth, which has soared in London and the South East. Yesterday, the Bank of England took the first step in putting the brakes on the property market as it scrapped an initiative that has had a significant part to play in encouraging mortgage lending. Governor Mark Carney said the FLS stimulus would instead focus purely on helping small business borrowing, which remains muted. FLS has offered lenders access to cheap finance on condition that they pass on the benefits to borrowers, and experts yesterday said that the Bank's move could spell the "beginning of the end" for ultra-cheap mortgage deals. Fears of a looming property bubble have been growing in recent months amid a string of reports suggesting demand in the housing market far outstrips the growth in the supply of homes. London in particular has seen strong demand this year, and Land Registry figures released on Thursday showed that house prices in London were up by 8.7% year-on-year in October. But the market remains patchy and prices in the North East have dropped by 3.1% year-on-year, according to the registry. The latest phase of Help to Buy, which offers state-backed mortgages to people with deposits as low as 5% was launched in October and this is expected to inject further activity into the market among credit-worthy buyers who have particularly struggled to get on the housing ladder or move up it since the financial crisis struck because they have a lack of upfront funds. Lenders representing around two-thirds of the mortgage market have committed to coming on board the scheme and there are also signs of competition increasing to attract low-deposit borrowers from lenders which are outside the Help to Buy scheme.