Business World

Friday 23 February 2018

'Inflation and political uncertainty' hit UK house prices

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David Milliken

Asking prices for British houses and apartments fell in June, the first decline in the month since 2009, led by drops in the London area as wage growth slowed and political uncertainty rose.

Property website Rightmove said average asking prices for property sold on its website dropped 0.4pc in June, normally a month which sees a seasonal price rise, after rising 1.2pc.

"The price of property coming to the market had increased in June in every year since 2009, so buyers' confidence has clearly been affected by inflation outstripping their pay packets and current political events," Rightmove director Miles Shipside said.

The figures are based on property advertised between May 14 and June 10, covering mostly the final weeks before a June 8 general election which saw UK Prime Minister Theresa May unexpectedly lose her parliamentary majority.

Mrs May has so far been unable to secure support for her Conservative Party from its most likely parliamentary ally, Northern Ireland's Democratic Unionist Party.

Figures last week showed consumer price inflation jumped to its highest in nearly four years at 2.9pc in May - squeezing households' disposable income - while wage growth has lagged behind.

In a move likely to make prospective homebuyers even warier, three of the Bank of England's eight policymakers voted to raise interest rates last week, the closest the central bank has come to increasing borrowing costs since 2007.

Prices in most of England and Wales rose, but a 2.4pc drop in London and smaller declines in parts of central and southeastern England, weighed on the overall average. (Reuters)

Irish Independent

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