UK house prices rise fastest


LONDON: British house prices have risen at their fastest annual rate since November 2011 this month, buoyed by a Bank of England initiative to reduce the cost of credit, data from mortgage lender Nationwide showed.

Nationwide said house prices rose by an annual 1.1% in May, slightly more than expected and up from April’s 0.9% annual increase. On the month, prices were 0.4% higher, in line with forecasts, after holding steady in April.

“There has been an improvement in the availability... of credit, partly as a result of policy measures, such as the (BoE’s) Funding for Lending Scheme. Indeed, mortgage rates have fallen back towards all-time lows in recent months,” said Nationwide’s chief economist, Robert Gardner.

Nationwide added that the number of property sales in the first four months of 2013 was 5% higher than the average in 2012 as a whole.

It forecast further price rises to come due to an improved economy, though a softening labour market and falling real wages would limit gains.

Finance minister George Osborne also announced a “Help to Buy” scheme in his annual budget statement in March that offers home-buyers subsidised mortgages – something many economists predict will push up house prices. – Reuters

It forecast further price rises to come due to an improved economy, though a softening labour market and falling real wages would limit gains.

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