House price inflation is pushing double-digit levels again after a sharp upswing in the past four months, Halifax said yesterday, in a sign that higher interest rates have so far had no impact on property prices.

The figures came as the Bank of England’s Monetary Policy Committee (MPC) voted to keep rates steady in December at 5 per cent. The no-change decision had been widely expected by economists.

Halifax said that house prices rose by 1.7 per cent in November, and were up by 9.6 per cent over the year on its adjusted annual rate, the fastest pace in more than one and a half years.

Unless prices drop this month, house price inflation will be above 10 per cent by the end of the year.

That will mark a remarkable turnaround for the sector. House prices were expected to have a subdued year and some analysts had forecast that they would decline.

The MPC’s decision to raise interest rates in August and November was also expected to dent buyer confidence, although the effect of tighter policy may take several months to become clear.

According to the Halifax, house prices rose by more than 6 per cent in the past four months. Prices for first-time buyer properties were reported as rising more quickly — by 11.5 per cent over the past year.

Martin Ellis, Halifax’s chief economist, said that housing market strength was underpinned by strong growth, rising employment, and a lack of supply.

However, he said that activity would weaken over the coming months. “The marked slowing in real average earnings growth over the past six months, and a squeeze on households’ discretionary income due to the substantial increase in utility bills during the last year, should temper housing demand,” he said.

The average price for a house now stands at £187,995, Halifax said.

Ed Stansfield, of Capital Economics, said: “With another rate rise in the New Year still likely, the balance of probability points to a significant slowdown in the housing market in 2007.”

Gordon Brown is among those predicting that property prices will ease in 2007. His Pre-Budget Report forecast that house price inflation would soften to around 4 per cent. But the Royal Institution of Chartered Surveyors (RICS) said that the Chancellor, who announced that newly built zero-carbon homes would be exempt from stamp duty, had not done enough to address the problems of new purchasers.

Stephen Thornton, of RICS, said: “Announcements by the Chancellor to help homebuyers in the Pre-Budget Report are are too small to address the overall affordability problem. The main avenue for addressing poor affordability will be a significant rise in housebuilding levels which the government continues to fall short on.”