United Kingdom: House prices grow at slowest pace in nearly two years
February 27, 2015
In February, home prices in the U.K. fell 0.1% over the previous month, which contrasted the 0.3% increase observed in January, according to the Nationwide Building Society (NBS). February’s drop also contrasted the 0.4% increase the market has expected. On an annual basis, home prices rose 5.7% (January: +6.8% year-on-year). The figure marked the slowest increase since September 2013. The average house price was GBP 187,964 (January 2015: GBP 188,446).
According to the monthly NBS report, the latest indicators provide evidence that the housing market is continuing to soften at the start of 2015. NBS added that, “the broader economic backdrop has remained supportive of housing market activity. Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions.” However, the pace of housing market activity remains subdued.
According to the Q4 2014 quarterly release, NBS data showed that, geographically speaking, the strongest increases in prices are still in the city of London, where the average house price rose 21.0% year-on-year. This is markedly higher than the 10.5% rise that has been recorded in the U.K. as a whole. The regions other than London that saw higher-than-average price increases were: Outer Metropolitan, Outer South East, East Anglia and Northern Ireland.
Author: Dirina Mançellari, Senior Economist