LONDON (Reuters) – British home costs rose at their slowest annual tempo in practically 5 years final month, figures from mortgage lender Halifax confirmed, the most recent signal of weakening within the housing market as Britain approaches its departure from the European Union.
Halifax mentioned on Wednesday that common home costs elevated by 1.eight p.c within the three months to February in contrast with the identical interval of 2017, slowing from 2.2 p.c in January and the weakest improve since March 2013.
However, the rise was a bit sooner than a forecast in a Reuters ballot of economists for progress of 1.6 p.c.
In month-to-month phrases, costs rose by zero.four p.c in February from January, the primary improve in three months, Halifax mentioned.
Britain’s housing market has been hit by the squeeze on family incomes brought on by larger inflation after the Brexit vote in 2016 pushed down the worth of the pound. Weak wage progress has added to the pressure on many households whereas the general financial system has slowed.
Before the referendum, the Halifax home value index confirmed home costs had been rising by as a lot as 10 p.c a yr.
Russell Galley, managing director at Halifax, mentioned costs would in all probability proceed to develop slowly as a result of mortgage charges remained low, regardless of November’s rate of interest improve by the Bank of England — its first in additional than a decade.
“The low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months,” he mentioned.
Last week, rival mortgage lender Nationwide additionally reported a slowdown within the tempo of progress in costs.
By distinction, knowledge from the BoE confirmed a stronger image for the housing market with the sharpest improve within the variety of mortgages accepted for home buy in practically three years in January.
Writing by William Schomberg; Editing by Catherine Evans