U.K. house prices rose marginally in November, slightly below expectations and continuing the recent trend of small gains.
Prices were up by a monthly 0.1% in November, Nationwide Building Society's data showed, compared with October's 0.2% growth and a forecast predicted gain of 0.2%. Compared with November last year, house prices grew by 2.5%, the same as October's annual rate of growth.
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The stable if modest rise in prices is in line with the marginal increases in annual house price growth numbers since March. High employment and low mortgage rates, as well as lack of supply in housing, is helping to support demand, but prices are being held back by the squeeze on household incomes that is keeping the rate of growth in a narrow range.
The Nationwide data also showed that the recent Budget decision to abolish stamp duty for first time buyers had a negligible impact on prices, as in many parts of the U.K. first time buyers were purchasing houses that fell under the previous price threshold of GBP125,000.
Budget proposals to massively increase the supply of housing nationwide, as well as similar initiatives announced Wednesday by London mayor Sadiq Khan, are seen as boosting housing supply. A shift in rules allowing the "change of use" of buildings, from shops and offices to residences, has already helped boost supply over the past decade, with the annual rate of housing supply gains rising 22% in London since its peak just before the global financial crisis in 2008.
British house prices are a strong indicator of the U.K.'s economic bill of health, as the country prepares to leave the European Union. Over the past three decades, U.K. households have cut spending every time that house prices have fallen.
This new reading on prices follows the release of GfK's consumer confidence survey overnight. The measure dropped two points to minus 12 after October's one point drop, indicating a declining mood among British consumers about the economy.
Write to Toby Luckhurst at email@example.com
(END) Dow Jones Newswires
November 30, 2017 02:35 ET (07:35 GMT)