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British house prices show largest monthly gain in 11 years

June 5, 2014

LONDRA (CIHAN)- House prices in Britain rose by 3.9 percent during May, it was reported Thursday by Halifax, one of Britain's biggest mortgage lenders.

It was the largest month-on-month gain reported by Halifax since October 2002.

House prices in the three months to May were 2 percent higher than in the three months to February, according to the lender. The quarter-on-quarter price change was a more reliable indicator of the underlying trend compared to the monthly price movement, it said.

House price changes with this measure remained steady in a narrow range of 1.9 percent to 2.3 percent since June 2013, it added.

Annually prices were 8.7 percent higher in the three months to May than in the same period last year.

"On an annual basis, housing demand is still strong and continues to be supported by a strengthening economic recovery. Consumer confidence is being boosted by a rapidly improving labor market and low interest rates, although growth in average earnings still remains weak," said Stephen Noakes, mortgages director at Halifax.

"However, there are signs of a revival in housebuilding which should bring supply and demand into better balance and curb upwards pressure on prices over the medium and longer term," he added.

Matthew Pointon, property economist at Capital Economics, an independent macroeconomic research company, said: "This latest rise in house prices will no doubt play on the minds of the financial policy committee, who are due to meet later this month with the housing market at the top of their agenda."

He said that whether they will take any action to cool the housing market, to prevent it posing a risk to financial stability, was still uncertain. The British government signalled they were committed to both aspects of the "Help to Buy" scheme during Wednesday's Queen's speech, which will make any recommendation to scale back the scheme more contentious.

"The news that mortgage approvals have dropped for three months in a row may convince the committee to hold back," he added. Enditem (Cihan/Xinhua)


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Source: Cihan News Agency (Turkey)