U.K. Property Prices Little Changed as Nationwide Sees Momentum
The average cost of a home fell 0.1 percent from March to a seasonally adjusted 165,586 pounds ($257,000), the Swindon, England-based customer-owned lender said today. From a year earlier, prices rose 0.9 percent, the biggest annual increase in 14 months.
U.K. mortgage approvals rose more than economists forecast in March and the Bank of England said home-loan availability may improve in the second quarter as its Funding for Lending Scheme helps to boost credit. The government expanded the FLS last month to stoke Britain’s economic recovery.
“The number of mortgage approvals has edged up from the levels prevailing last year,” said Robert Gardner, chief economist at Nationwide. “There are reasons for optimism that activity levels will continue to strengthen.”
Lenders granted 53,504 mortgages, compared with a revised 51,947 in February and 50,505 a year earlier, the BOE said yesterday. Economists had forecast an increase to 52,700 from an initially reported 51,653, based on the median of 18 estimates in a Bloomberg News survey.
In the quarter through April, home prices rose 0.5 percent compared with the previous three months, Nationwide said. It added that policies focused on increasing the “availability and lowering the cost of credit should continue to provide support.”
The U.K. economy expanded 0.3 percent in the first quarter, avoiding a triple-dip recession. Still, consumers are under pressure, with inflation running above the BOE’s 2 percent target and unemployment rising.
“There are tentative signs that wider economic conditions are starting to improve,” Nationwide said. “Nevertheless, progress is likely to be gradual.”
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