- U.K. House-Price Growth Slows in Line With Weakening Economy
U.K. house-price gains cooled in August after the economy slowed in the first half, Nationwide Building Society said.
The 2.1 percent annual increase matched May’s reading, which was the smallest since June 2013. On the month, prices fell 0.1 percent to an average of 210,495 pounds ($270,000).
The figures are the latest sign that worries about the wider economy are spilling over into the housing market. Britain posted the weakest expansion among Group of Seven nations this year as faster inflation and uncertainty about the future outside of the European Union weighed on consumption and investment. Economists see overall growth at 1.5 percent this year, compared with 1.8 percent in 2016.
“The slowdown in house price growth to the 2-3 percent range in recent months from the 4-5 percent prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy,” said Robert Gardner, Nationwide’s chief economist. “Housing market activity will remain subdued.”
A squeeze on household budgets as price growth has outpaced wage gains has put pressure on the housing market, despite unemployment dropping to its lowest in more than 40 years and mortgage rates close to all-time lows.
Nationwide still expects house-price growth to average about 2 percent this year, as a shortage of properties on the market continues to prop up values. The stock of homes on estate agents’ books is close to 30-year lows, according to the report, and a lack of new homes coming on to the market has added to housing supply pressures.