The Department for Communities and Local Government (DCLG) has said that house prices in the UK accelerated significantly at the end of last year and now stand at an average of almost £200,000.

It said that average prices were rising by 8.9% in November, up from 8.6% in October, taking the average price for homebuyers wishing to make a saving and investment in property to £199,467.

Property prices have risen fastest in Northern Ireland, where they rose 36.6% in the 12 months to November 2006.

The speed up in house prices means that the value of the UK’s housing stock has risen to £3.8 trillion according to Halifax, meaning that the total stock of residential property rose by 12% over the year.

The figures mean that the value of homes in the UK is 3.5 times more than the mortgages outstanding on them, as people continue to make a massive saving and investment in property.

Many observers of the market believe the strength and economic resilience of the housing market were prime factors behind last week’s decision to raise the Bank Rate. If house prices continue to rise, many believe that interest rates will go up again to follow them.