LONDON (Reuters) – British house prices rose at their slowest annual rate in more than a year this month but the market looks set to recover in 2015 if the economy improves as expected, a survey from mortgage lender Nationwide showed.
Nationwide said house prices rose 7.2 per cent in the year to December, the smallest annual increase since November 2013 and slowing for a fourth consecutive month. Economists polled by Reuters had expected growth of 7.5 per cent.
British housing market activity and price rises have been slowing since the middle of the year, in part because of steps by regulators to require lenders to make tougher checks on borrowers’ ability to repay mortgages.
House price growth in the three months to December – which many analysts view as the best guide to the short-term trend in house prices – nevertheless ticked up to 1.0 per cent, from 0.9 per cent in the preceding three months.
And although annual house price inflation fell in 12 out of 13 British regions – with only the north of England seeing faster growth – Nationwide said it expected the market to recover next year.
“The weakening of buyer interest in houses may be close to bottoming out and we see it picking up to a limited extent in 2015 from current levels,” said Howard Archer, economist at IHS Global Insight.
“There is also the possibility that the markedly increased likelihood that the Bank of England will not lift interest rates before late 2015 will provide some limited near-term impetus to housing market activity.”