London: UK house prices rose the most in five months in August as a shortage of supply supported values even amid weaker demand.
Prices rose 0.6 per cent from July and were up 5.6 per cent compared with a year earlier, Nationwide Building Society said in London. Surveys had suggested that Brexit was having an effect on the property market, undermining demand and sales, and the Bank of England said on Tuesday that mortgage approvals dropped to an 18-month low in July.
Nationwide said the outlook for housing remains clouded. While consumer data has held up, weaker business surveys suggest a slowdown, which could have had a negative impact on the labour market and household confidence, it said.
“The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months,” said Nationwide chief economist Robert Gardner. “However, the decline in demand appears to have been matched by weakness on the supply side of the market.”
The UK’s housing market has also cooled since the start of the year when investors brought forward purchases ahead of a tax hike that came into effect in April. Nationwide said prices have risen 1.1 per cent in the past three months, taking the average to £206,145 ($270,000).
