British House Prices Rebound Amid Economic Resilience

British house prices increased by 0.4% in May, reversing a two-month decline. This growth surpasses economists' expectations and shows market resilience despite high borrowing costs. Improved consumer confidence and wage gains have contributed to the revival. Analysts expect a 1.8% increase in property prices in 2024.

Reuters | Updated: 31-05-2024 11:50 IST | Created: 31-05-2024 11:50 IST
British House Prices Rebound Amid Economic Resilience
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British house prices rose in May after falling in the previous two months as the property market withstood high borrowing costs, figures from mortgage lender Nationwide showed on Friday.

Prices increased by 0.4% from April, the data showed. Economists polled by Reuters had mostly expected a 0.1% monthly rise.

Compared with May last year, prices were 1.3% higher, a bigger increase than the median forecast in the Reuters poll for a 0.8% gain. "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months," Robert Gardner, chief economist at Nationwide, said.

"Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation." Britain's housing market slowed in 2023 as the Bank of England pushed interest rates to their highest since 2008. But expectations of lower borrowing costs have helped to push down mortgage rates and revive the market in recent months.

A Reuters poll of housing market analysts

published on Thursday showed property prices in Britain were expected to edge up by 1.8% in 2024 as faster growth in wages makes homes more affordable. Nationwide said the approach of Britain's national election on July 4 was unlikely to affect the market in the coming weeks, noting that in the past broader economic trends appeared to have dominated immediate election-related impacts.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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