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U.K. House-Price Index Rises to Six-Month High on Credit Plan

A pedestrian passes the window of an estate agents in Chelmsford. Photographer: Chris Ratcliffe/Bloomberg
A pedestrian passes the window of an estate agents in Chelmsford. Photographer: Chris Ratcliffe/Bloomberg

Oct. 9 (Bloomberg) -- A U.K. house-price index rose to its highest in six months in September as measures to boost credit prompted real-estate agents to become less pessimistic about the outlook, the Royal Institution of Chartered Surveyors said.

The gauge rose to minus 15 from minus 18 in August, London-based RICS said in an e-mailed report today, citing a monthly poll of property surveyors. A result below zero means more saw values drop than increase last month. A measure of price expectations also climbed to its highest since March.

The Bank of England started its Funding for Lending plan in August to boost credit by giving banks access to cheaper finance. Still, Britain’s property market remains under pressure as the economy struggles to recover from a recession and the euro-area debt crisis undermines consumer confidence.

“The housing market was relatively flat during September, but surveyors are optimistic that the run-in to Christmas could see an increase in activity,” RICS director Peter Bolton King said “Despite this, problems still exist and more needs to be done to get the market moving. Although the Funding for Lending Scheme appears to be improving mortgage availability, those at the very bottom of the housing ladder are still struggling.”

While prices fell in September, they declined at a slower rate than previous months, Bolton King said. Sales expectations increased to their highest level since May 2010, and RICS said housing transactions may pick up over the coming months.

Retail Sales

In a separate report, the British Retail Consortium said retail sales rose the fastest in nine months in September as colder weather boosted demand for coats, boots and knitwear.

Sales at stores open at least 12 months, measured by value, gained 1.5 percent from a year earlier, the London-based trade group said. Including stores open less than 12 months, retail sales rose 3.4 percent last month from a year earlier.

“After a poor summer for sales, this is a return to growth rates we’ve come to regard as relatively acceptable in these relentlessly tough times,” BRC Director General Stephen Robertson said. Still, “customers are still cautious but less fearful than they were.”

In the three months through September, food sales increased 0.7 percent from a year earlier on a like-for-like basis, while non-food sales rose 0.3 percent, the BRC said.

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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