U.K. House Prices Barely Rise as Income Squeeze Hits ConfidenceBy
Values rise 0.1% on the month, 2.5% versus year earlier
Nationwide says Budget measures may only have modest effect
U.K. house-price growth barely rose this month, according to Nationwide Building Society, which said demand is being partly restrained by weaker consumer sentiment.
Values increased 0.1 percent from October, leaving the annual gain at 2.5 percent. That’s within the range seen in 2017, though it’s well below the pace of recent years.
The lender said low mortgage rates and employment growth are supporting demand, “but this is being partly offset by pressure on household incomes.”
While there’s been a lot of focus on the slowdown in the U.K. property market, particularly in London, a bigger issue for many is trying to afford their first home. Years of surging values have put ownership out of the reach, a situation not helped by weak wage growth.
The Nationwide figures come just a week after the budget, which saw the government unveil its latest attempt to help aspiring first-time buyers. Nationwide said the measures would probably only have a “modest” effect on demand.
In the Budget, Chancellor of the Exchequer Philip Hammond abolished stamp duty for first-time buyers on homes up to 300,000 pounds ($404,000). The move also applies to the initial 300,000 pounds of the purchase price of first homes up to the value of 500,000 pounds. Hammond also commissioned a review of land use so ensure developers aren’t hoarding sites.
Figures from the Bank of England show the number of mortgage approvals fell in October to the lowest in more than a year. Net lending was the weakest since April. Samuel Tombs, an economist at Pantheon in London, said surveys showing declines in buyer interest suggest mortgage demand will fall further.
— With assistance by Mark Evans