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U.K. House-Price Growth Slowed in July on Property Supply Pickup

While property supply picked up this month, a shortage of homes for sale in recent months has supported prices and is likely to continue to do so. Photographer: Simon Dawson/Bloomberg
While property supply picked up this month, a shortage of homes for sale in recent months has supported prices and is likely to continue to do so. Photographer: Simon Dawson/Bloomberg

July 29 (Bloomberg) -- U.K. house-price growth slowed in July as more Britons offered their property for sale and demand cooled at the start of the summer, according to Hometrack Ltd.

Average values in England and Wales increased 0.3 percent after a 0.4 percent gain in June, the London-based property researcher said in a statement today. From a year earlier, prices were up 1.3 percent, the most since 2010.

The government has taken steps to help Britons’ entry into the housing market, with measures to encourage sales of newly built property and guarantees for borrowers with smaller deposits. While property supply picked up this month, a shortage of homes for sale in recent months has supported prices and is likely to continue to do so.

Supply is “likely to expand further as vendors look to benefit from improving market sentiment,” said Richard Donnell, director of research at Hometrack. “However we do not expect growth in supply to be sufficient to erode the scarcity of homes for sale. This is likely to remain an important feature in the market in the second half of the year.”

Hometrack said property listings rose 2.4 percent in July, up from 1.6 percent in June. New buyers registering with real-estate agents rose 1 percent, down from 1.6 percent.

Mortgage approvals probably rose to 59,700 in June from 58,242 in May, economists said in a survey before data today from the Bank of England. That would be the highest in more than five years. The central bank will publish the report, along with data on consumer credit, at 9:30 a.m.

Consumers are helping drive the economic recovery, with second-quarter growth of 0.6 percent fueled in part by retail sales. Gross domestic product is still 3.3 percent below its peak in early 2008.

Bank of England policy makers will meet this week as they assess the merits of giving investors more information on the future path of policy. They’ll leave their bond-purchase plan at 375 billion pounds ($576 billion), according to all but one of 42 economists in a Bloomberg News survey. The key interest rate will stay at a record low of 0.5 percent, a separate poll showed.

To contact the reporter on this story: Jennifer Ryan at jryan13@bloomberg.net

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

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