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British house prices rose at their slowest annual pace in nearly five years last month, figures from mortgage lender Halifax showed, the latest sign of weakening in the housing market as Britain approaches its departure from the European Union.

Halifax said on Wednesday that average house prices increased by 1.8 percent in the three months to February compared with the same period of 2017, slowing from 2.2 percent in January and the weakest increase since March 2013.

However, the rise was a bit faster than a forecast in a Reuters poll of economists for growth of 1.6 percent.

In monthly terms, prices rose by 0.4 percent in February from January, the first increase in three months, Halifax said.

Britain’s housing market has been hit by the squeeze on household incomes caused by higher inflation after the Brexit vote in 2016 pushed down the value of the pound. Weak wage growth has added to the strain on many households while the overall economy has slowed.

Before the referendum, the Halifax house price index showed house prices were rising by as much as 10 percent a year.

Russell Galley, managing director at Halifax, said prices would probably continue to grow slowly because mortgage rates remained low, despite November’s interest rate increase by the Bank of England — its first in more than a decade.

“The low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months,” he said.

Last week, rival mortgage lender Nationwide also reported a slowdown in the pace of growth in prices.

By contrast, data from the BoE showed a stronger picture for the housing market with the sharpest increase in the number of mortgages approved for house purchase in nearly three years in January.

Source: Yahoo News UK

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