Sunday 24 September 2017

UK house prices rise for 16th consecutive month

UK house prices have risen again.
UK house prices have risen again.

UK HOUSE prices rose for a 16th month and consumer confidence increased to a nine-year high on an improving outlook for the economy.

Hometrack said home prices in England and Wales increased 0.5pc in May after a 0.6pc jump in April.

In a separate report, research group GfK said its sentiment index jumped 3 points to 0 this month, the first time there hasn't been a negative reading since April 2005.

Britain's strengthening economic recovery has helped to boost property-market demand, creating an issue for Bank of England policy-makers as price increases strain affordability.

Banks have tightened up mortgage-lending criteria and the BoE's Financial Policy Committee will assess risks posed by property at its meeting next month.

"Strong price increases, widespread talk of a possible housing bubble and recent warnings from the Bank of England on house-price inflation are starting to test the resolve of buyers," Richard Donnell, director of research at Hometrack, said in a statement.

Property demand continued to outpace supply in May, according to Hometrack, though it said growth in demand is beginning to moderate. There were other signs of a softer market, with the share of postcodes reporting price gains slipping to 42pc from 50pc.

Prices in London's commuter area in the South East led gains this month with a 0.7pc increase, followed by a 0.6pc rise in both the capital and the East Midlands.

GfK's survey showed that optimism about the economic outlook jumped 4 points to 12 this month.

Irish Independent

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