U.K. House Prices Rise Fastest in a Year as London Rebounds

  • Average value climbed to 297,832 pounds in February: Acadata
  • London prices gained in January for first month in three

U.K. house prices rose at their fastest pace in a year last month as high-value London property showed signs of a rebound.

The 0.6 percent increase in values lifted the average to 297,832 pounds ($362,000), Acadata and LSL said in a report on Monday. Nevertheless, annual price growth softened for a 12th month, to 2.4 percent, the lowest since 2013.

According to regional data for January, London home prices gained 0.4 percent from December, snapping a two-month decline, and gains in the high-value areas of the capital contributed to the increase in February. The city’s property market “still faces challenges,” Acadata said, noting that the annual gain in prices was the weakest in almost five years and transactions have slumped 22 percent over the past three months compared with a year earlier.

Over 2016, the U.K. capital was one of the worst performers among 10 regions analyzed, partly due to weakness in prime locations because of Brexit and tax changes. Lack of affordability has also contributed to the slowdown, with data by Lloyds Bank last month showing the average home in the capital cost more than 10 times annual earnings.

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