UK House Prices Set To Rise Further In Near Term: Capital Economics
01-31-2014
LONDON (Alliance News) - House prices in the UK will likely continue their upward trend in the coming months, but will moderate in the long term as selling conditions improve, Capital Economics Property Economist Matthew Pointon said.
While the Bank of England is unlikely to raise rates until late 2015, the recent increase in wholesale interest rates could push mortgage rates up in the coming months, helping to curb housing demand, the firm said.
Data from the Nationwide Housing Society on Wednesday showed that the house prices in the UK rose 0.7% month-on-month in January, marking the twelfth successive increase. Year-on-year, prices climbed 8.8%.
According to the economist, the recovery is being boosted by the recent support schemes unveiled by the government, with a significant number of households using the Help to Buy scheme.
The recovery in the housing market is consistent with the GDP data for the fourth quarter, which showed a 0.7% quarter-over-quarter growth. In another sign of improving fundamentals, employment increased strongly in the three months to November, pushing down the unemployment rate to 7.1%.
Copyright RTT News/dpa-AFX