By: William Schomberg
LONDON: Asking prices for homes in England and Wales are rising more slowly due to rising consumer price inflation, worries about Brexit and tighter lending rules, property data firm Rightmove said on Monday, adding to signs of a slowing property market.
Prices sought by sellers during the month to February 11 – when there is typically a seasonal price spike of about 5 percent – were just 2.0 percent higher than the month before, the weakest increase for the time of year since 2009.
Compared with a year earlier, asking prices were 2.3 % higher, the smallest increase since April 2013.
“Perhaps we’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and a dose of Brexit uncertainty,” Rightmove director Miles Shipside said.
Britain’s housing market proved much more resilient than the Bank of England expected after June’s vote to leave the EU, with home-buyers focusing on solid short-run trends in disposable income, rather than the longer-term squeeze the BoE predicts.
However, data last week showed a third successive monthly fall in retail sales – which the BoE believes reflect similar factors to house-purchase decisions – and mortgage lenders Halifax and Nationwide reported slower price growth in January.
But Rightmove said there was still strong interest among potential buyers with traffic to its site – which advertises about 90 percent of homes for sale – hitting a new record for the month of January.
A Reuters poll of economists published in December pointed to a 2 percent rise in British house prices this year, reflecting headwinds from uncertainty about the country’s decision to leave the European Union.
Britain’s economy is expected to slow moderately this year with inflation set to rise to around 3 percent from 1.8 percent at the end of 2016. (Editing by David Milliken)
Source: Reuters