British annual house prices rose at the slowest annual rate in more than a year this month as the property market continued to lose momentum across the country, figures from mortgage lender Nationwide showed on Tuesday.
Nationwide said house prices rose 7.2 percent in the year to December, the smallest annual increase since November last year and slowing for a fourth consecutive month. Economists polled by Reuters had expected growth of 7.5 percent.
British housing market activity and price rises have been slowing since the middle of the year, in part because of steps by regulators to require lenders to make tougher checks on borrowers’ ability to repay mortgages.
Still, house price growth in the three months to December — which many analysts view as the best guide to the short-term trend in house prices — ticked up to 1.0 percent, from 0.9 percent in the preceding three months.
And although annual house price growth cooled in 12 out of 13 British regions, Nationwide said it expected the market to recover next year.
“If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead,” said Robert Gardner, Nationwide’s chief economist.
“There are encouraging signs that construction is starting to pick up. Hopefully, this will set the stage for house price growth gradually converging with income growth in the quarters ahead.”
Gardner added that recent changes to the stamp duty land tax could also help to stimulate the housing market.
While Britain looks set to be one of the fastest growing major industrialized economies this year, wage growth is still very weak, making houses hard to afford for many British workers. The Bank of England is also expected to raise interest rates late next year for the first time since 2007.
Source : Reuters