UK house price growth ‘slows’ in November

Prices still supported by shortage of properties for sale on the market

British house price growth slowed this month, according to a survey published on Friday which 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 per cent in monthly terms in November compared with a 0.5 per cent increase in October.

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

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

"The annual rate of house price growth has fluctuated in a fairly narrow range between three and four per cent 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 and the number of mortgage approvals is below levels seen before the financial crisis.

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 per cent 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 new, 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.