UK house-price growth weakened to 13-month low in December

LONDON: UK house-price growth slowed to its weakest in more than a year in December, adding to evidence that the market for residential property is cooling. The annual gain in value dropped to 7.2 percent from 8.5 percent in November, the lowest rate since November 2013 and the fourth consecutive slowdown, Nationwide Building Society said in a statement on its website today. Prices rose 0.2 percent on the month for a third straight increase.

The housing market has slowed this year, with home-loan approvals falling to their lowest in 16 months in October, as affordability is stretched and the Bank of England moves to prevent a buildup of unsustainable lending. Still, Nationwide said the slowdown was "surprising," given gains in employment, a pickup in wage growth and low mortgage rates.

"If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead," Robert Gardner, chief economist at Nationwide, said in the statement. "Hopefully, this will set the stage for house-price growth gradually converging with income growth in the quarters ahead." The average house price stands at 188,559 pounds ($292,400), with growth for the three months to December at 1 percent compared with 0.9 percent in the quarter through November, Swindon, England-based Nationwide said. The 7.2 percent gain in values nationally this year compares with 8.4 percent in 2013. Nationwide said house-price inflation moderated in all but one of 13 regions in the fourth quarter from a year earlier. London, the strongest performing area, posted a gain of 17.8 percent compared with 21 percent in the previous three months.