The annual rate of increase in British house prices fell to its lowest level in nearly a year this month as the property market continued to lose momentum, figures from mortgage lender Nationwide showed today.
Nationwide said house prices rose 8.5 per cent in the year to November, the smallest increase since December last year, and well below June’s near 10-year peak of 11.8 per cent.
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.
Price growth in the three months to November - which many analysts view as the best guide to the short-term trend in house prices - fell to 0.9 per cent, the lowest since June 2013. "With housing market activity appreciably off its early-2014 highs, we suspect house prices will generally rise at a much more sedate rate over the coming months," said Howard Archer, chief UK economist at IHS Global Insight.
The British Bankers' Association said on Tuesday its members were approving the fewest mortgages since May 2013. Nationwide said the number of approvals was just two thirds of its long-run average. "There is something of a disconnect between the slowdown in the housing market in recent months and broader economic indicators, which have remained relatively upbeat," said Robert Gardner, chief economist at Nationwide.
Britain’s economy looks set to be the fastest growing among the major industrialised nations this year, though 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 next year for the first time since 2007.
Mr Gardner added that the national slowdown could not be put down solely to weakness in London - where annual price growth has fallen sharply from rates of more than 20 per cent earlier this year - as previous data for the three months to September had shown price growth slowing in 10 out of 13 British regions.
Reuters
