LONDON (Reuters) – British home costs gained a little bit of momentum in July after rising at their slowest annual charge in 5 years in June, mortgage lender Nationwide stated on Wednesday.
FILE PHOTO – New residential houses are seen at a housing property in Aylesbury, Britain, February 7, 2017. REUTERS/Eddie Keogh
House costs rose by a mean 2.5 p.c from July final yr, sooner than progress of two.zero p.c in June and above a forecast for a 1.9 p.c rise in a Reuters ballot of economists.
In month-to-month phrases, costs rose by zero.6 p.c in July from June, sooner than the Reuters ballot forecast of zero.2 p.c.
Nationwide stated the annual enhance remained within the slim 2-Three p.c vary of the previous 12 months and the lender nonetheless anticipated costs to rise by only one p.c in 2018.
Britain’s housing market has slowed for the reason that 2016 referendum resolution to take the nation out of the European Union. Eight months earlier than Brexit is because of occur, Prime Minister Theresa May has nonetheless to agree with the EU about Britain’s future buying and selling relationship with the bloc.
Nationwide economist Robert Gardner stated an anticipated rate of interest hike by the Bank of England on Thursday was prone to have solely a modest affect on the housing market as a result of most mortgages issued in recent times had been on fastened rates of interest.
However, round 12 p.c of house owners already spend over 30 p.c of their gross earnings on their mortgage and “for those, some of whom will be on variable rates, any rate rise will be a struggle, even though the impact on the wider economy and most households is likely to be modest,” Gardner stated.
Writing by William Schomberg; Editing by Raissa Kasolowsky