U.K. House Prices Gain More Than Expected as Strength PersistsBy
Nationwide forecasts 2% increase in average values this year
London market weaker, according to some property reports
U.K. house prices rose more than expected in February, according to Nationwide Building Society, a sign that the market’s strength has extended into this year.
Prices gained 0.6 percent from January, a third month of gains. Economists predicted an increase 0.2 percent. From a year earlier, prices climbed 4.5 percent to an average of 205,846 pounds ($254,000).
Britain’s housing market and the wider economy have been surprisingly resilient since the vote to leave the European Union in June. Still, the Bank of England sees cooler expansion this year as consumer spending moderates.
Nationwide doesn’t provide a regional breakdown, though other reports suggest the market is weaker in London, with more home sellers having to cut asking prices. London home prices have surged about 86 percent since 2009, meaning it now costs buyers 14.2 times their annual gross salary to purchase a property, more than double the U.K. average.
Nationwide predicts a modest 2 percent increase in average U.K. house prices this year, citing low borrowing costs and a dearth of homes for sale. The shortage of homes has underpinned the house-price boom of the last two decades.
“Recent data suggests that the U.K. economy has continued to perform relatively strongly,” said Nationwide chief economist Robert Gardner said. “The outlook is uncertain, but we, along with most other forecasters, expect the U.K. economy to slow through 2017.”
— With assistance by Mark Evans, Harumi Ichikura, and Catherine Bosley