U.K. house prices rose for a second month in October, according to Nationwide Building Society, which said the market is still “treading water” and values may slip again over the coming year.
The average cost of a home rose 0.4 percent from September to 165,650 pounds ($267,300), the Swindon, England-based customer-owned lender said in an e-mailed report today. From a year earlier, values were up 0.8 percent, the first annual increase in six months.
“The outlook remains uncertain,” Nationwide Chief Economist Robert Gardner said in the report. “With the U.K. economic recovery expected to remain sluggish, house price growth is likely to remain soft in the period ahead, with prices moving sideways or drifting modestly lower over the next year.”
The housing market has struggled to gain momentum as accelerating inflation and government cuts weaken consumer confidence and Europe’s debt crisis pushes up bank funding costs. A report by mortgage lender Halifax today showed Britons’ housing-market confidence has fallen in the past six months, while Hometrack Ltd. said yesterday that prices based on its measure declined for a sixth month in October.
The Bank of England said this week that mortgage approvals fell to 50,967 in September from 52,347 in August. Average monthly approvals amounted to 103,000 in the decade to 2007.
Data today will show U.K. gross domestic product rose 0.3 percent in third quarter compared with a 0.1 percent increase in the second quarter, according to the median of 36 forecasts in a Bloomberg News survey. The Office for National Statistics will publish the data at 9:30 a.m. Manufacturing probably stagnated in October, while services growth slowed, according to separate economist surveys before reports this week.
As the euro area crisis threatens the U.K. recovery, the Bank of England expanded its bond-purchase program by 75 billion pounds to 275 billion pounds on Oct. 6. The bank also kept its key interest rate at a record low of 0.5 percent.
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