United Kingdom: House prices increase in April
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 0.2% in April compared to the previous month in seasonally adjusted terms, contrasting March’s 0.2% decrease and marking the first monthly increase since January this year. On an annual basis, house prices rose 2.6% in April, hitting analysts’ expectations and up from March’s 2.1%. The average house price in April was GDP 213,000 (April 2017: GBP 207,699).
April’s result came as the first shoots of real wage growth appeared to show in the December?February period. Nevertheless, stubbornly depressed consumer confidence helped ensure that house price growth was minimal in April.
This year, house price growth is likely to be low, reflecting a further economic slowdown, low consumer confidence and pressure on household budgets. However, a solid labor market and tight housing supply should continue to prop up prices. The future path of interest rates will be a key determinant of the evolution of the housing market going forward. In this regard, the possibility of faster-than-expected monetary tightening by the Bank of England would likely put downward pressure on property prices.