U.K. House Prices Increase as Property-Market Strength Broadens
U.K. house prices rose for a fifth month in June as a shortage of properties boosted values, according to Hometrack Ltd.
Average values in England and Wales increased 0.4 percent, the same as in May, which was the biggest in six years, the London-based property researcher said today. From a year earlier, prices were up an annual 0.8 percent. London led monthly gains with a 0.9 percent surge.
The Bank of England’s Funding for Lending Scheme has helped ease credit strains and loosened the supply of mortgages. Hometrack said the improvement in the property market is spreading beyond London, with 31 percent of postcodes reporting higher prices last month, the most since September 2007.
“We expect prices to continue to increase, though at a slower rate, as we move into the summer months,” said Richard Donnell, director of research at Hometrack. “An expansion in supply to ease the pressure on prices looks unlikely and the short-term direction for the market depends upon demand and expectations over the outlook.”
First-time buyer demand is rising at a time when owners are holding off listing their homes until they have a new house secured, Hometrack said. Growth in property listings slowed to 1.6 percent in June from 2.8 percent in May.
Hometrack’s report adds to signs of strength in the market. Nationwide Building Society said June 28 prices rose 0.3 percent last month from May. Values increased 1.9 percent from a year earlier.
Mark Carney will lead his first meeting as governor of the central bank this week and will assess whether further aid to the economy is needed to support the recovery. The BOE will probably leave its bond-purchase program unchanged at the meeting, according to a Bloomberg News survey of economists.
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