U.K. House Prices Fall for Second Month as Market Treads Water
U.K. house prices fell for a second month in August and will probably remain little changed into 2013, according to Halifax.
Values fell 0.4 percent from the previous month to an average 160,256 pounds ($255,000), the mortgage unit of Lloyds Banking Group Plc (LLOY) said in a statement in London today. From a year earlier, values were down 1.1 percent.
“House prices continue to tread water, as measured by the underlying trend,” Halifax economist Martin Ellis said. “A gradual upward trend in spending power, aided by lower inflation, should help to support housing demand in the coming months. Nonetheless, house prices are likely to remain flat over the remainder of 2012 and into next year.”
Britain’s property market remains under pressure as the economy struggles to recover from a recession and the euro-area debt crisis drags on, undermining confidence and pushing up lending costs. The Bank of England, which is due to complete a 50 billion-pound round of bond purchases in November, will probably keep its target for stimulus unchanged today.
Over the past year, house prices have declined in seven months and increased in five, based on Halifax data. In the three months through August, prices were 0.3 percent lower compared with the preceding three months, and were down 0.9 percent down on the same period in 2011.
Property website operator Rightmove Plc said last month that U.K. home sellers cut asking prices by a record for the month of August after the London Olympic Games and an uncertain economic outlook distracted potential buyers. Average asking prices in England and Wales fell 2.4 percent from July, when values declined 1.7 percent, it said.
The Bank of England will maintain its bond-purchase target at 375 billion pounds today, according to 38 out of 39 economists in a Bloomberg News survey. Policy makers will also leave their benchmark interest rate at a record-low 0.5 percent, all 51 economists said in a separate poll. The decisions will be announced at noon.
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