U.K. House Prices Decline as Halifax Says Prospects Uncertain

U.K. house prices slipped in January, according to Halifax, which said the outlook for the property market remains unclear.

Home values fell 0.2 percent from the previous month to an average 162,932 pounds ($255,000), the mortgage unit of Lloyds Banking Group Plc said in a statement in London today. From a year earlier, values rose 1.1 percent.

“The outlook for the U.K. economy and house prices, however, is more unclear than usual,” said Martin Ellis, a Halifax economist. “Subdued economic growth and pressures on household finances are expected to constrain housing demand.”

While the British economy, weighed down by fiscal austerity at home and a contraction in the euro area, faces the risk of a triple-dip recession, there is some evidence credit conditions are easing. Bank of England Governor Mervyn King said last month that access to loans should improve further thanks to the bank’s credit boosting plan, and data last week showed mortgage approvals rose more than expected in December.

In the three months through January, home prices rose 1.9 percent compared with the previous three months, today’s report showed. From a year earlier, values were up 1.3 percent. Ellis said the signs of improvement in the housing market seen toward the end of last year continued in January.

Britain’s economy shrank 0.3 percent in the final quarter of 2012. The National Institute of Economic and Social Research cut its 2013 growth forecast yesterday to 0.7 percent from 1.1 percent and said stagnation may persist.

Recent house-price data have been mixed. Nationwide Building Society said last week that values rose in January, while Hometrack said on Jan. 28 that prices stagnated after declining for the previous six months.

The BOE will probably keep the size of its bond-purchase program unchanged and leave its key interest rate at a record-low 0.5 percent tomorrow, according to two surveys of economists.

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