UK house prices continued their upward march in October and are now 5.8% higher than they were a year ago, according to latest figures from the Nationwide. It marks the highest level of annual house price growth for three years.
The building society reported house prices increasing by 1% in October, bringing the average price of a house in the UK to £173,678.
October's figures indicate the government's attempts to boost the housing market through its Help to Buy scheme may be starting to pay off. The second part of the Help to Buy Scheme was launched earlier this month.
Nationwide chief economist Robert Gardner said the UK's housing market seems to be following a "resilient upward trend".
He added: "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."
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Commenting on the new figures, Nicholas Ayre, managing director of homebuying agency Home Fusion, says that buyers are beginning to feel more positive: "In the past they may have just sat on their hands and been reluctant to do anything, but now, with the macro view of the economy looking a lot more positive, people are wanting to get that property they have been waiting for and not get lost in the action.
"The Nationwide figures show us that headline house prices are tracking the economy in its recovery and upward trend, annual growth at 5.8%, is just keeping ahead of inflation, which is a healthy line of growth and where we should expect it to be.
"Although wages have continued to decline in real terms, we are seeing a steady spread of loan-to-value mortgages, so buyers do not seem to be maxing out on finance and are keeping within affordability boundaries."
According to James Hall, director of estate agency Fishneedwater, first-time buyer activity and low mortgage rates are one of the reasons for this boost to the housing market.
"First-time buyers have been the catalyst of the revival, driving transaction levels across the rest of the market.
"The property market is performing largely because the mortgage market is so attractive. People see the rates on offer and it's hard not to make the most of them. They're too good to resist."