House prices in the UK grew at the fastest rate in nearly two years in November, in a surprise acceleration despite near-record highs straining affordability, according to figures from Nationwide.

The annual growth rate rebounded to 3.7% in November, up from 2.4% in October, according to the UK’s biggest building society. That was the fastest rate since November 2022.

The jump in prices pushed the average price of purchases through Nationwide to £268,144, just 1% below the record. Nationwide’s data is more timely but less complete than that from the Office for National Statistics, which found average UK house prices increased by 2.9%, to £292,000, in the year to September 2024.

That record was reached in the summer of 2022, when the rush for homes after the Covid pandemic lockdowns combined with historically low interest rates. However, conditions for borrowers have worsened significantly since then as central banks raised interest rates sharply to combat inflation – leaving a puzzle over how demand for homes is being sustained.

Robert Gardner, the Nationwide chief economist, said: “The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.

“Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.”

Gardner added: “Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year.”

Household debt levels are at their lowest levels relative to household income since the mid-2000s, Gardner said.

Prices increased by a robust 1.2% in November compared with October, after taking account of seasonal effects. That was the largest monthly gain since March 2022.

Ruth Gregory, the deputy chief UK economist at Capital Economics, a consultancy, said she doubted the strength will be sustained, because the ratio of prices to incomes is “still stretched by past standards”. However, she added that she expected a drop in interest rates offered by mortgage lenders, helping to sustain activity next year.

Nationwide said the figures were not thought to have been significantly affected by Labour’s first budget, as most of the mortgage applications were started before it took place on 30 October. The chancellor, Rachel Reeves, made limited changes to stamp duty, raising the tax on purchases of second homes from April.

The budget changes could mean higher transaction numbers until the end of March as second-home buyers seek to beat the deadline. That could be followed by lower numbers for a few months.