United Kingdom: House prices grow at slowest pace in over a year
January 30, 2015
In January, home prices in the U.K. rose 0.3% over the previous month, which followed the 0.2% increase observed in December, according to the Nationwide Building Society (NBS). January’s increase met market expectations. On an annual basis, home prices rose 6.8% (December: +7.2% year-on-year). The figure marked the slowest increase since November 2013. The average house price was GBP 189,446 (January 2014: GBP 176,491).
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 further moderation in the pace of price growth is unsurprising, given the slowdown in housing market activity in recent months. […] The reason for the slowdown remains unclear. Unemployment has continued to decline and wage growth has started to outstrip increases in the cost of living for the first time since the financial crisis.”
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