U.K. Home-Price Index Near 2002 High as Carney Sees StrengthScott Hamilton
A U.K. house-price index stayed close to the highest in more than a decade last month and the outlook for the coming quarter improved amid a lack of supply.
A measure by the Royal Institution of Chartered Surveyors was at 56 after a reading of 58 in November, the London-based group said today, citing a survey of property surveyors. A three-month price-expectations gauge rose to 61 from 59, the highest since 1999.
Bank of England Governor Mark Carney said yesterday he expects a further strengthening of the property market this year. While the central bank has downplayed concerns a bubble may be brewing, it scaled back a mortgage lending program late last year, a move Carney described as “taking the foot off the accelerator, not putting the foot on the brake.”
“Growing availability of affordable mortgages has released some pent-up demand,” said Peter Bolton King, RICS global residential director. “On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale, we could well be looking at price rises becoming unsustainable in some areas.”
London and the southeast led price gains in December as all regions tracked by RICS saw increases. The group said respondents to the survey expect both sales and values to “continue to increase through the course of this year,” helped by easing credit conditions.
“Our general expectation has been for a continuation of current momentum, house-price momentum, and mortgage activity and credit-growth momentum into 2014 before decelerating around the middle of 2015 towards 2016,” Carney told Parliament’s Treasury Committee in London yesterday. After this, increases in mortgage and total household debt will be more in line with the growth rate of incomes, he said.
Further evidence of the housing recovery emerged today as Bovis Homes Group Plc said sales climbed 19 percent last year as the U.K. homebuilder sold larger properties on more valuable sites in southern England. It is likely to announce a “significant increase” in pretax for the full year.
Bovis shares have risen about 33 percent in the past 12 months, compared with 14 percent for the FTSE 350 Index.