Buildings in the City of London are seen alongside Victorian residential housing in South London, Britain, August 1, 2023. REUTERS/ Susannah Ireland

LONDON, Dec 2 (Reuters) - British house prices rose slightly faster than expected in November, in the run-up to finance minister Rachel Reeves' budget, while higher wages were improving affordability, mortgage lender Nationwide said on Tuesday.

House prices last month rose by 0.3% on a seasonally adjusted basis, taking the average to 272,998 pounds ($360,739.56), after a 0.2% increase in October, slowing the annual rate of growth to 1.8% from 2.4%, the figures from Nationwide Building Society showed.

Economists polled by Reuters had forecast a 0.1% monthly increase and a 1.4% annual rise.

Data published by the Bank of England on Monday showed the number of mortgages approved by lenders in October came in higher than expected.

The BoE is widely expected to cut its main interest rate to 3.75% from 4% in December.

"Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters," Nationwide Chief Economist Robert Gardner said.

Some other recent gauges of the property sector have suggested a slowing in house price growth which has been attributed to caution among homebuyers in the lead-up to Reeves' November 26 tax and spend plan.

Gardner said a tax on expensive homes announced by Reeves last week, would not have a significant impact on the housing sector, but could dampen the supply of new rental properties coming onto the market.

($1 = 0.7568 pounds)

(Reporting by Suban Abdulla; editing by Sarah Young)