LONDON (Reuters) – British house prices rose in the three months to August at their fastest annual rate since November last year, figures from major mortgage lender Halifax showed on Friday, bolstered by a gradual pick-up in wages and limited supply.
Halifax said house prices in the period were 3.7 percent higher than a year earlier, up from a 3.3 percent growth rate in the three months to July but a slightly smaller increase than the average forecast in a Reuters poll.
The figures contrast with data from rival mortgage lender Nationwide last week, which reported prices were up just 2 percent on the year in August, the joint-smallest increase in five years.
Britain’s housing market began slowing in the run-up to June 2016’s Brexit vote. The biggest slowdown has been in London, due to reduced appetite from foreign investors and concerns about the financial services industry, with less of an impact in other parts of the United Kingdom.
A “stable, yet constrained” supply of new homes was supporting prices, as was a gradual pick-up in wage growth, Halifax managing director Russell Galley said.
Looking at the month of August alone, house prices rose 0.1 percent from July, when they jumped by 1.2 percent.
Howard Archer, an economist at consultancy EY ITEM Club, said he did not see an upturn on the way for British house prices and expected annual house price growth of 2.5 percent this year and next.
“Consumer confidence is fragile and appreciable caution persists over engaging in major transactions. Potential house buyers may also be concerned that they are likely to face further interest rate hikes over the medium term following August’s hike,” he said.
The Bank of England raised interest rates to 0.75 percent in August in only its second increase since before the global financial crisis. BoE Governor Mark Carney said market expectations of one rate rise per year over the next few years would be a good rule of thumb for households.