U.K. House-Price Growth Will Slow This Year, Nationwide SaysBy
Annual rate of increase slipped back to 4.3% in January
Slower jobs growth, faster inflation may weigh on demand
U.K. house-price inflation cooled to the least in more than a year in January, according to Nationwide Building Society, which warned of a slowdown this year as pressure on consumers’ pockets intensifies.
The annual rate of growth eased to 4.3 percent -- the weakest since November 2015 -- from 4.5 percent in December. On a monthly basis, values edged up 0.2 percent to an average 205,240 pounds ($258,000).
On the outlook, Nationwide chief economist Robert Gardner said in a statement Wednesday it is “clouded, reflecting the uncertainty surrounding economic prospects more broadly.” While the U.K. economy’s stronger-than-expected performance since the Brexit vote is grounds for optimism, he noted that employment growth is moderating and inflation accelerating, both of which will put pressure on households.
“The decline in consumer confidence and slowdown in income growth towards the end of last year is weighing on price momentum,” said Samuel Tombs, an economist at Pantheon in London. He expects home-price inflation to continue to weaken in the coming months.
Nationwide is maintaining its forecast for a modest 2 percent increase in average house prices this year, citing low borrowing costs and a dearth of homes for sale. That supply-demand imbalance has been a feature of the market for years and has helped to support continued growth in values.