U.K. house prices rose modestly in October, posting a month-on-month increase that was in line with expectations.
House prices grew 0.2% in October compared with September's revised 0.4% growth, according to data from the Nationwide Building Society.
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Compared with October last year, prices grew by 2.5%, slightly above the forecasted figure and an improvement on September's annual rate of 2.3%.
The small rise in prices is due in part to high employment and low mortgage rates, as well as a lack of housing supply. However, prices are being held back by the squeeze on household incomes, keeping the rate of growth in a narrow range.
The Nationwide data also showed that migration is helping prop up demand, especially in private renting in London, yet Britain's exit from the European Union could cause demand to slow as migration levels fall.
Whether house prices hold up as Britain disentangles itself from the EU matters to the overall health of the British economy. Over the past three decades, U.K. households have cut spending every time house prices have fallen.
House prices could be affected if the Bank of England decides to raise interest rates at its November meeting on Thursday, as is widely expected.
Write to Toby Luckhurst at firstname.lastname@example.org
(END) Dow Jones Newswires
November 01, 2017 07:57 ET (11:57 GMT)