February 28, 2020 / 7:13 AM / a month ago

UK house prices rise by most since mid-2018 - Nationwide

FILE PHOTO: Property sale signs are seen outside of a group of newly built houses in west London, Britain, November 23, 2017. REUTERS/Toby Melville

LONDON (Reuters) - British house prices rose in February at their fastest annual pace since July 2018, mortgage lender Nationwide said, adding to signs of a rebound in the housing market and the broader economy since December’s election.

Prices rose by 2.3% compared with February 2019, Nationwide said on Friday, speeding up from a 1.9% rise in January and matching the median forecast in a Reuters poll of economists.

The emphatic election victory of Prime Minister Boris Johnson cleared much of the short-term uncertainty hanging over Britain’s economy, paving the way for the country’s Jan. 31 exit from the European Union and ending the possibility of a political shift to the left under the opposition Labour Party.

Surveys published earlier on Friday showed confidence among British consumers hit its highest level in 18 months in February and that companies were also more positive.

Last month, the Bank of England decided not to cut interest rates as it saw early signs of a recovery in the economy.

“The decisive election outcome may have provided a boost to buyer sentiment,” Nationwide’s chief economist Robert Gardner said. But “significant uncertainties” remained ahead, ranging from the impact of coronavirus on the world economy and the outcome of negotiations for a new trade deal with the EU.

“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole,” he said.

In monthly terms, prices rose by 0.3%, slower than a 0.5% rise in January, Nationwide said.

Writing by William Schomberg; Editing by Jason Neely and Alex Richardson

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