UK house-price growth cools to its weakest pace in 5 years

LONDON: UK house-price growth slowed in June, dropping to its weakest pace in five years, according to Nationwide Building Society.

The lender said the “subdued economic activity” and squeezed household budgets are keeping a lid on demand, and the market is unlikely to see any change in its recent trend.

Nationwide’s monthly report showed prices rose 2% in June from a year earlier, down from 2.4% in May. It expects prices to continue to weaken and rise just 1% this year.

On the more volatile monthly measure, values were up 0.5 % in June.

“Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent,” said Robert Gardner, chief economist at Nationwide.

“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labor market, but also with respect to interest rates.”

The Bank of England held off raising inter- est rates in May, though it’s hinted monetary policy may tighten at some point later this year.

It raised benchmark borrowing costs to 0.5% in November, the first hike in a decade.

Recent housing reports have been downbeat in recent months.

The Royal Institution of Chartered Surveyors’ gauge of house prices came in at minus three last month, which although an improvement from April is still consistent with no change in prices.