UK house price growth cools for third month running

Growth in British house prices cooled for the third straight month in March, despite recording their biggest annual rise in almost four years, data from mortgage lender Nationwide showed on Wednesday.

House prices rose 0.4 per cent last month, the slowest pace of monthly growth since June last year, slowing from an upwardly revised 0.7 per cent increase in February, the lender said.

But in year-on-year terms, house prices in March were 9.5 per cent higher, stronger than a rise of 9.4 per cent in the 12 months to February and the biggest annual jump since May 2010.

The average price of a house in Britain now stands at £180,264, about 3 per cent below the 2007 peak unadjusted for inflation, Nationwide said.

"There is little doubt that the recovery in the housing market is now firmly established, with activity levels picking up and house prices recording their 15th successive monthly increase in March," said Robert Gardner, chief economist at Nationwide. "(But) there are some tentative signs of moderation."

Data from the Bank of England on Monday showed mortgage approvals slowed more than expected in February, possibly reflecting bad weather during the month.

Mr Gardner said low mortgage rates, easier credit and a brighter outlook for the economy were all boosting demand for housing although the supply of houses continues to lag far behind.

“The number of new homes being built in England is still around 40 per cent below pre-crisis levels, and this was already insufficient to keep up with the increase in the number of households being formed,” he said.

The government is seeking to boost construction of homes to help address a shortage that is helping to push up prices.

Bank of England governor Mark Carney and other officials have played down suggestions that the housing market is overheating. But the Bank refocused its Funding for Lending Scheme away from mortgage lending and dedicated it exclusively to business lending at the start of this year.

Reuters