Growth of British house prices stalls in November

LONDON: British house price growth slowed this month, according to a survey published yesterday that suggested the recovery in the housing market, which recently pushed prices to new record highs, is advancing at a modest pace.

Mortgage lender Nationwide said house prices rose by a less-than-expected 0.1% in monthly terms in November compared with a 0.5% increase in October.

Economists polled by Reuters had forecast 0.5% growth this month. It was the weakest monthly performance since June, Nationwide said.

House prices rose 3.7% in year-on-year terms, slowing from 3.9% in October.

“The annual rate of house price growth has fluctuated in a fairly narrow range between 3% and 4% over the past six months, which is broadly consistent with earnings growth over the longer term,” Robert Gardner, Nationwide’s chief economist, said in a statement.

British house price growth cooled last year after the introduction of stricter rules for mortgage lending.

The number of mortgage approvals is below levels seen before the financial crisis, according to data from lenders.

But prices are still supported by a shortage of properties on the market for sale. Earlier this week, the government said it would provide more financial support for house-building and announced a new tax for investors buying properties in order to rent them.

Nationwide said 135,000 new homes were built in England in the 12 months to September, a long way below the roughly 220,000 new households that are projected to form each year over the next decade.

The Nationwide survey has tended to estimate slower price growth than other measures of house prices. An index compiled by rival mortgage lender Halifax showed prices rose by nearly 10% in yearly terms in the three months to October.

The Bank of England has signalled that it may move as soon as next week to introduce higher capital requirements for banks after a two-year recovery in Britain’s economy, but the changes are unlikely to have a big immediate impact on lending or the housing market.