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Further signs emerge that British housing market is cooling - Hometrack
May 30, 2014 / 8:17 AM / 3 years ago

Further signs emerge that British housing market is cooling - Hometrack

LONDON (Reuters) - House prices rose more slowly in May than in April across England and Wales, a survey showed on Friday, in another sign that Britain’s housing market may be starting to cool.

However, the report from property analysts Hometrack still showed robust growth in outright terms, as house price growth on an annual basis reached a new seven-year high.

House prices rose 0.5 percent in May, down from 0.6 percent in April and the slowest pace of growth since January, Hometrack said. The proportion of districts reporting price increases fell to 42 percent from 50 percent the previous month.

The survey of estate agents and surveyors followed data on Tuesday that showed British banks approved the smallest number of mortgages since August last year.

“Strong price increases, widespread talk of a possible housing bubble and recent warnings from the Bank of England on house price inflation are starting to test the resolve of buyers,” said Richard Donnell, director of research at Hometrack.

Donnell said he expected to see further signs that house price momentum was slowing in the months ahead, including signs that London’s red-hot property market is starting to cool off.

Still, prices rose 6.1 percent on an annual basis, the strongest such rise since June 2007, just before the start of the financial crisis.

Mortgage lender Nationwide said on Wednesday that the price of homes in Britain’s capital may start to fall this summer, potentially reducing the need for new measures to cool the market.

Britain’s government said on Thursday its mortgage guarantee programme has accounted for only a small fraction of lending for home-buying, following criticism that the Help to Buy scheme was helping to fuel a housing bubble.

Reporting by Andy Bruce; Editing by Larry King

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