LONDON (Reuters) – British house prices regained momentum in September, recording their fastest annual rise since February as buyers shrugged off the possibility of higher Bank of England interest rates, figures from major mortgage lender Halifax showed on Friday.
House prices rose 0.8 percent on the month in September alone, beating all economists’ forecasts in a Reuters poll, while prices in the three months to September were 4.0 percent higher versus average expectations of a 3.6 percent rise.
But economists doubted the figures, which contrast with more subdued numbers from rival lender Nationwide, heralded a real end to the slowdown in British house prices seen since the start of the year.
“Despite some overall firming in mortgage activity from mid-2017 lows, we remain sceptical about any marked housing market upturn,” Howard Archer of consultancy EY ITEM Club said.
British house prices were likely to be “muted” for the rest of the year and would rise by 2-3 percent in 2018, he predicted.
Halifax said prices were boosted by a lack of properties for sale and solid growth in full-time employment, though a squeeze on spending power from higher consumer price inflation and the high cost of property might limit future demand.
Most economists expect the BoE to raise interest rates for the first time in more than a decade next month. But Halifax said it did not expect this likely increase in official rates to 0.5 percent from 0.25 percent to hurt the housing market.
“There has been recent speculation on the possibility of a rise in the Bank of England base rate. We do not anticipate this will have a significant effect on transaction volumes,” said Russell Galley, managing director of Halifax’s community bank.
Halifax is part of Lloyds Banking Group (LLOY.L), and is one of Britain’s two biggest mortgage lenders, alongside Nationwide Building Society.
Earlier this month, Nationwide reported 2.0 percent annual growth in house prices and the first fall in London prices for eight years.
Source: UK Reuters