U.K. House Prices Rise to Record as Sales SurgeJillian Ward
U.K. home prices rose to a record last month as sales reached the highest in seven years, according to Acadata.
Values rose 0.6 percent from June and were up 9.9 percent compared with a year earlier, pushing the average price to 270,636 pounds ($456,000), it said in statement today. About 90,000 properties were sold, marking a 21 percent surge over the past year.
While the report adds to evidence of a booming property market, Acadata said the national picture is being skewed by London and the south east. Other reports have indicated the market is cooling after stricter lending rules were introduced this year, and Bank of England Deputy Governor Ben Broadbent said last month that the “edge is coming off” U.K. housing.
“The market is quite difficult to read at the moment, as various indicators give different views,” Acadata Chairman Peter Williams said. Anticipation of interest-rate increases by the Bank of England has also “dampened the slightly frenetic behavior that was emerging in some markets,” he said.
The BOE kept its key rate at a record-low 0.5 percent yesterday. While traders are betting policy makers will not increase rates until March, some economists predict a move by the end of this year.
Separate data today showed U.K. construction output rose 4.8 percent in the second quarter compared with a year earlier. New private homebuilding surged 17.1 percent in the same period. Markit Economics said earlier this month that U.K. homebuilding expanded at the fastest pace in more than a decade in July.
Acadata noted that recent housing surveys show more people think it’s a good time to sell property rather than buy.
“This does suggest uncertainty regarding prices and the way households might sense a slowing market,” Williams said. “Selling now to capture buoyant prices, but delay buying to see how they settle in the next few months.”
The report also showed that first-time buyers and buy-to-let landlords are spurring activity in the housing market. On a regional basis, London led price gains, with a 19 percent annual increase in the past three months. Values in the south east were up 8.4 percent.