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The housing market recovery continues as the UK basks in increasingly positive economic data that points to rapid growth in 2014.

Property prices rose 0.5% in November due to a combination of rising demand and contracting supply, according to the latest monthly survey from Hometrack, published this morning.

It said demand has grown 10.2% over the last six months, while supply has fallen by 0.6%. Once again, London and the South East performed best.

This follows Bank of England lending figures, published on Friday, showing loan approvals for house purchases hitting 67,701 in October, up from an average of 60,685 over the previous six months.

Some £141.5 billion worth of mortgages were approved in the first 10 months of 2013, only slightly below last year's full-year total of £143.7 billion.

And figures from Nationwide, also published on Friday, showed house prices rising 6.5% in the past year to hit a 40-month high. Prices rose 0.6% in November, slightly down from 1% in October.

A series of bullish reports about the UK economy has boosted confidence as 2013 draws to a close.

Goldman Sachs have described the UK's performance as "one of the most notable economic surprise stories of 2013", and upgraded its growth forecast for 2014 to 2.7%, up from 2.4%.

Analysts at the bank said: "At this stage, there is no evidence of a moderation in UK growth indicators and we view the risks to our growth forecasts as skewed to the upside in the near term."

The Office of Budget Responsibility has upgraded its GDP growth forecast for 2014 to 2.5%, from 1.8%.

Manufacturing is expected to grow strongly in 2014, with forecast growth of 2.7% according to figures from EEF published today.

Richard Sexton, director of e.surv chartered surveyors, said: “House purchase lending is charging forwards, having advanced steadily for 10 of the last 12 months.

"The Funding for Lending Scheme powered the first wave of confidence for both lenders and buyers, but Help to Buy will continue to drive lending forwards, even as FLS is trimmed back."

David Brown, commercial director of LSL Property Services, said the property market continues to gather momentum. "It isn’t anywhere near what would once have been called ‘normal conditions’, but we’re going in the right direction."

Karelia Scott-Daniels, managing director of buying agents Manse & Garret Property Search, warned the market may be experiencing an unnaturally strong rate of growth.

"The return of the property market is to be welcomed but at the same time we need sustainable growth, not a supernova. 

"The Bank of England's decision this week to focus the Funding for Lending scheme exclusively on small business loans during 2014 is the clearest sign yet that policymakers are worried.

"The Nationwide is right to point out that sentiment among prospective buyers has improved considerably but people need to be careful about overstretching. 

"The property market can be a powerful drug and people need to try and step back and look at it objectively."


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