UK house prices edge up in April

Published: April 27, 2018 14:44:01 | Updated: April 30, 2018 16:40:34

House prices in United Kingdom (UK) rose a bit more quickly in April after touching a seven-month low in the previous month, the mortgage lender Nationwide said.

The Nationwide said that they are still expected to slow the price this year, reflecting weak economic growth and possibly higher interest rates.

The house prices rose 2.6 per cent in the year to April compared with a rise of 2.1 per cent in March and in line with the median forecast in a Reuters poll of economists.

Prices rose 0.2 per cent on the month after a drop of 0.2 per cent in March, also matching the median forecast in the poll.

House prices are rising much more slowly than before the 2016 referendum decision to take Britain out of the European Union, which hit consumer confidence and spending as the pound’s fall pushed up inflation.

Nationwide’s measure of house prices was growing by about 5.0 per cent a year around the time of the Brexit vote and the lender said on Friday it continued to expect house price growth of just 1.0 per cent in 2018, reports Reuters.

“Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates,” Robert Gardner, Nationwide’s chief economist, said.

The Bank of England has said it expects to continue raising interest rates after making the first increase in over a decade in November. Investors see a roughly 50-50 chance of a hike in May.

However, a shortage of homes for sale is expected to continue to shore up the housing market.

An industry group said earlier on Friday that in 2017/18 financial year, housing starts of 154,698 were 2 per cent lower than a record high in 2016/17.

The British Prime Minister Theresa May wants construction of new homes to rise to 300,000 a year to tackle a shortage of housing.

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