United Kingdom: Increase in house prices decelerates in April
May 2, 2016
In April, home prices in the United Kingdom rose 0.2% over the previous month, which was down from the previous month’s 0.8% increase, according to the Nationwide Building Society (NBS). On an annual basis, home prices rose 4.9% (March: +5.7% year-on-year). The average house price was GBP 202,436 (March 2016: GBP 200,251).
According to the NBS, “the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead.” Moreover, the NBS commented that the number of residential property transactions broadly spiked in March due to the introduction of the additional stamp duty levy on second properties from 1 April.
According to the Q1 2016 quarterly release, NBS data showed that, geographically speaking, the strongest increases in prices are in the city of London, where the average house price rose 12.2% year-on-year. This is markedly higher than the 4.3% rise that has been recorded in the United Kingdom as a whole. The regions other than London that saw higher-than-average price increases were: Outer Metropolitan, Outer South East and South West.
Author: Dirina Mançellari, Senior Economist