LONDON (Reuters) - British house prices rose in January at their fastest annual rate since November 2018, adding to signs of a modest pick up in the housing market and broader economic confidence since December’s election, industry figures showed on Wednesday.
Nationwide Building Society said annual house price growth in January increased to 1.9% from December’s 1.4%, above all forecasts in a Reuters poll of economists, in what it called a “modest pickup”.
“Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook,” Nationwide’s chief economist, Robert Gardner, said.
House prices in January alone rose by 0.5% on the month, up from 0.1% in December and above the average forecast of a 0.3% rise.
The Bank of England will need to weigh up signs of a recent economic pick-up against an overall sluggish picture in official measures of growth at the end of last year, when it decided whether to announce an interest rate cut on Thursday.
“There is compelling evidence that the housing market has got an initial leg-up from increased optimism and reduced uncertainties following the decisive general election result as well as greater near-term clarity on Brexit,” Howard Archer, economist with EY ITEM Club, said.
Archer said he was raising his forecast for British house price gains in 2020 to 2.8% from 2.0% as a result.
Reporting by David Milliken; Editing by Toby Chopra