United Kingdom: House prices pick up in August
August 29, 2014
According to the Nationwide Building Society (NBS), home prices in the U.K. rose 0.8% over the previous month in August, which marked the 15th consecutive monthly increase. The figure came in above both the 0.1% rise recorded in July and market expectations of house prices increasing at 0.1%. On an annual basis, home prices rose 11.0% (July: +10.6% year-on-year). The average house price was GBP 189,306 (August 2013: GBP 170,514), marking the highest level on record.
According to the monthly NBS report, demand in the housing market is expected to decrease in the coming quarters mainly due to the prospect of interest rate increases and subdued wage growth. However, the NBS report also said that, “consumer sentiment remains buoyant thanks to declining inflation and sustained increases in employment.” This is likely to provide support for the housing market.
According to the Q2 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 25.8% year-on-year. This is markedly higher than the 11.5% rise that has been recorded in the UK as a whole. Only two regions other than London saw higher-than-average price increases: Outer Metropolitan London and Outer South East.
Author: Dirina Mançellari, Senior Economist