Photographer: Matthew Lloyd/Bloomberg

U.K. House Prices Jump 1.7% to Record on Property Shortage

U.K. house prices surged the most in five months in June as a shortage of property for sale continued to put upward pressure on values.

The average cost of a home rose 1.7 percent from May to an average 200,280 pounds ($308,500), mortgage lender Halifax said on Wednesday. From a year earlier, prices jumped 9.4 percent.

“Supply remains very tight,” said Martin Ellis, an economist at Halifax. “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015.”

On a less volatile quarterly basis, prices rose 3.3 percent in the three months through June, up from 2.7 percent in the first quarter. Ellis said rising employment and real-wage growth, coupled with low borrowing costs are also fueling the market and there has been a “recent modest pick-up in demand.”

Nationwide Building Society said last week that annual house-price growth cooled to 3.3 percent in June, the least in two years, from 4.6 percent. It said there has been a “gradual downward trend” since mid-2014.

Nevertheless, Bank of England Governor Mark Carney isn’t taking chances. Citing momentum in the market, he said this month the central bank is maintaining measures aimed at restricting riskier mortgage borrowing.

Read this next:

Before it's here, it's on the Bloomberg Terminal. LEARN MORE