U.K. House Prices Decline for a Third Month on ‘Weak’ Economy
U.K. house prices fell for a third month in September and will probably remain little changed into 2013 as the uncertain economic outlook constrains property demand, according to Halifax.
Values dropped 0.4 percent from the previous month to an average 159,486 pounds ($257,000), 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, and Halifax said there has been a “slight deterioration in the trend recently.”
Britain’s property market remains under pressure as the economy struggles to recover from a recession and restrictions on lending make it harder to get mortgages. The Bank of England started a Funding for Lending plan in August to boost credit by giving banks access to cheaper funding.
“The generally weak economic climate remains a significant constraint on housing demand,” Halifax economist Martin Ellis said. “We expect house prices to be broadly unchanged over the rest of this year and into 2013.”
Over the past year, house prices have declined in seven months and increased in five, based on Halifax data. In the three months through September, prices fell 0.5 percent compared with the preceding three months, and were down 1.2 percent down on the same period in 2011.
The Bank of England will maintain its bond-purchase target at 375 billion pounds today, according to all 40 economists in a Bloomberg News survey. Policy makers will also leave their benchmark interest rate at a record-low 0.5 percent, all 50 economists said in a separate poll. The decisions will be announced at noon in London.
To contact the reporter on this story: Scott Hamilton in London at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com