UK house price growth cools to three-month low in August

Rows of houses are seen in North Kensington, London, Britain June 29, 2017. [Photo/Agencies]

LONDON - British house price growth eased to a three-month low in August, adding to signs that the squeeze on household spending since last year’s Brexit vote has led to a slowdown in the housing market, a survey showed on Tuesday.

Mortgage lender Nationwide said house prices rose 2.1 percent year-on-year in August, slowing from 2.9 percent in July and matching May’s four-year low.

A Reuters poll of economists had pointed to annual growth of 2.5 percent.

Britain’s housing sector has slowed sharply since the vote in June 2016 to leave the European Union, when prices were growing by more than 5 percent a year.

“The moderation in price growth primarily reflects the squeeze on real wages and the slowdown in the pace that mortgage rates are falling,” said Samuel Tombs, economist at consultancy Pantheon Macroeconomics.

“Prices likely will continue to struggle to rise much, given that inflation still has further to rise, consumer confidence has deteriorated sharply since June and lenders intend to reduce the supply of unsecured credit.”

Nationwide said house prices slipped 0.1 percent in August compared with the previous month, after rising 0.2 percent in July.

Other house price surveys have painted a similar picture.

The Royal Institution of Chartered Surveyors said British house prices rose at their slowest rate in over four years last month, while the number of sales slowed due to a limited supply of property and continued political uncertainty.

On Wednesday the Bank of England is due to publish mortgage lending data for July.