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UK home costs fall for first time in six months – Halifax

LONDON (Reuters) – British home costs unexpectedly fell in December in contrast with November, their first decline in six months, mortgage lender Halifax mentioned on Monday, including to indicators of weak spot within the nation’s housing market because the 2016 Brexit vote.

FILE PHOTO: Terraced homes are seen in Primrose Hill, London, Britain, September 24, 2017. REUTERS/Eddie Keogh/File Photo – RC1486B9BE00

House costs slipped by zero.6 % month-on-month after a zero.three % rise in November, Halifax mentioned.

Economists collaborating in a Reuters ballot had anticipated costs to rise by zero.2 %.

On an annual foundation, home value development slowed to an annual 2.7 % within the three months to December, weaker than an increase of three.9 % in November. The Reuters ballot of economists had pointed to a three.three % rise.

Shortly earlier than the referendum determination to go away the European Union in June 2016, Halifax was reporting annual beneficial properties in home costs of round 10 %.

The pound’s fall after the vote pushed up inflation and added to stress on the funds of households. Furthermore, many companies are holding again on funding selections as they await readability on Britain’s future relationship with the EU.

Samuel Tombs, an economist with Pantheon Macroeconomics, mentioned the Bank of England’s first rate of interest hike in additional than a decade, made in November, was additionally weighing on the market.

“Halifax’s data suggest that the recent jump in new mortgage rates has poured cold water on a market that already was flagging,” he mentioned.

Two surveys revealed earlier on Monday confirmed that British customers tightened their belts over Christmas, resulting in the primary year-on-year fall in spending since 2012, and main companies intention to do the identical over 2018.

“The housing market in 2017 followed a similar pattern to the previous year,” Russell Galley, managing director of Halifax Community Bank, mentioned.

“House price growth slowed, whilst building activity, completed sales and mortgage approvals for house purchase all remained flat. This has been driven by a squeeze on real wage growth and continuing uncertainty over the economy.”

However, a scarcity of houses up on the market was more likely to proceed to shore up the market and Halifax reiterated its forecast for development of between zero and three % in home costs in 2018.

Last week, rival mortgage lender Nationwide mentioned its measure of British home costs grew final 12 months at its slowest tempo since 2012 and in London it fell for the primary time in a full 12 months since 2009.

Writing by William Schomberg; Editing by Peter Graff and Toby Chopra

Our Standards:The Thomson Reuters Trust Principles.

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