British house prices rose more quickly than expected last month, recovering from the weakest month for more than a year in January, but concerns about Brexit are likely to weigh on the market this year, mortgage lender Nationwide said yesterday.
Nationwide said house prices rose by a monthly 0.6 percent last month, compared with 0.2 percent in January.
In annual terms, prices were 4.5 percent higher, a stronger rise than January’s 4.3 percent, which was the weakest increase since November 2015.
Economists polled by Reuters had expected house prices to rise 0.2 percent sequentially last month and for annual growth to slow to 4 percent.
The resilience of Britain’s housing market since the referendum decision to leave the EU in June last year has confounded warnings from former British chancellor of the exchequer George Osborne of a sharp fall in prices if the country voted to leave.
Nationwide economist Robert Gardner said Britain’s economy is likely to slow this year as the country prepares to leave the EU and inflation eats into consumers’ spending power.
“Nevertheless, in our view a small rise in house prices of around 2 percent is more likely than a decline over the course of 2017, since low borrowing costs and the dearth of homes on the market will continue to support prices,” he said.
Pantheon Macroeconomics economist Samuel Tombs said there were signs that prices would slow down soon, citing online data which showed a weakening of growth in asking prices for homes and in the size of mortgages.
“For now, then, the pickup in Nationwide’s measure of house price growth in February looks like volatility,” Tombs said, adding that he also expected prices to rise by 2 percent this year.
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