LONDON (Reuters) - British annual house price growth slid to a four-year low last month, underlining the housing market’s slowdown since last year’s Brexit vote, mortgage lender Halifax said on Wednesday.
Average house prices in the three months to May were 3.3 percent higher than a year earlier, the weakest increase since May 2013 and slowing from a 3.8 percent rise in April. Economists in a Reuters poll had expected to see a somewhat sharper slowdown to 3.0 percent.
In May alone, house prices were 0.4 percent higher than in April, confounding forecasts for 0.1 percent drop.
With Britons just a day away from voting in a national election, the figures added to signs that households are reining back spending in the face of higher inflation fuelled by rising energy costs and the weakened pound since the vote for Brexit.
A separate survey from rival mortgage lender Nationwide last week showed house prices fell for three months in a row for the first time since 2009. [GB/HNAT]
“The fundamentals for house buyers are likely to deteriorate further over the coming months with consumers’ purchasing power squeezed further by a combination of higher inflation and muted earnings growth,” Howard Archer, economist for forecasters EY ITEM Club said.
The housing market has slowed sharply since last June’s vote to leave the European Union, when prices were growing by almost 10 percent a year. Bank of England figures showed the number of mortgages approved by lenders slid to a seven-month low in April.
Still, Halifax said a weak supply of new homes and existing properties for sale, combined with low interest rates and high unemployment, should support house prices over the coming months.
Editing by Adrian Croft