U.K. House Prices Rise for a Second Month, Halifax Says
U.K. house prices rose for a second month in June, according to Halifax, which expects little change in values for the rest of the year.
Values increased 1 percent from the previous month, when they rose 0.4 percent, the mortgage unit of Lloyds Banking Group Plc (LLOY) said in a statement in London today. From a year earlier, prices were down 0.2 percent to an average 162,417 pounds ($253,200).
The U.K. property market has struggled to recover amid tight lending conditions that’s made it difficult to get a mortgage. The Bank of England, which is working on a new plan with the government to boost lending, will probably decide today to expand stimulus to stoke an economic recovery and keep its benchmark interest rate at a record low.
“Continuing low levels of mortgage payments relative to income and recent increases in employment may have helped support house prices so far this year,” Halifax economist Martin Ellis said. “We expect little change in prices and sales over the remainder of the year provided that the U.K.’s economic outlook does not deteriorate significantly.”
Over the past year, there have been six monthly price increases and six declines, based on Halifax data. In the second quarter, values fell 0.3 percent compared with the quarter through March and were down 0.5 percent from a year earlier.
Other recent data point to a slowdown in the housing market. Hometrack Ltd. said this week that property prices stopped rising in June for the first time in four months as economic uncertainty and a seasonal slowdown curtailed activity in a market that now faces “downward pressure.” Nationwide Building Society said prices fell 0.6 percent last month.
Mortgage approvals fell to 51,098 in May from 51,627 the previous month, the Bank of England said on July 3.
Policy makers will probably increase their bond-purchase program by 50 billion pounds to 375 billion pounds, according to the median estimate of 41 economists in a Bloomberg News survey. They’ll also hold the benchmark interest rate at 0.5 percent, according to a separate poll. The bank will announce the decisions at noon in London.
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