UK house prices rise at fastest annual pace since 2010 - Nationwide

LONDON Fri Jun 28, 2013 12:20pm BST

A woman walks past houses on a street in London March 13, 2012. REUTERS/Luke MacGregor

A woman walks past houses on a street in London March 13, 2012.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - British house prices rose at their fastest annual pace in nearly three years this month, data from mortgage lender Nationwide showed on Friday, adding to signs that Britain's economy is starting to pick up.

Nationwide said that house prices rose by 0.3 percent on the month in June to give a 1.9 percent annual rise - broadly in line with expectations and the biggest yearly increase since September 2010.

House prices had risen 0.4 percent on the month in May, and the data follows a GfK consumer confidence released earlier on Friday which showed the highest morale in more than two years.

"Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme," said Nationwide's chief economist Robert Gardner.

The FLS - which was set up by the Bank of England and Britain's finance ministry a year ago - offers banks and building societies cheap finance if they increase lending.

To date, its main impact has been in lowering banks' borrowing costs and reducing the cost of mortgages.

Chancellor George Osborne also announced measures in his March budget aimed at boosting house-building, but there has been little impact so far.

"There are few signs that the supply of housing is improving significantly. Indeed, construction data point to a further decline in building activity in recent quarters from already depressed levels," Gardner said.

(Reporting by David Milliken; editing by Ron Askew)

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Comments (2)
EssexInvestor wrote:
Here comes another bubble. Actually in London it has not stopped because overseas buyers have kept central London prices booming and even outer boroughs have seen overseas demand and prices there have stayed close to the peaks.

The fundamentals do not support higher prices.

When interest rates rise the current buyers and many from just before the last peak of house prices will be wiped out.

Jun 28, 2013 8:40am BST  --  Report as abuse
uksimon wrote:
Sick of reading this blatant spin. We’ve all been subjected to it for years. If we believed it all, the housing market has “fully recovered” 50 times over.

Clearly the evidence shows it has not. Timing could be better, what with recent announcements of cutbacks, stagnating economy and spiraling national debt. It has to be funded, and squeezing the public will only serve to push prices down. On the subject, the rates have to go up at some point, regardless of the effect on house prices. Nows bot a good time to buy.

Jun 28, 2013 9:47am BST  --  Report as abuse
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