House prices gained a
bit of momentum in July after rising at their slowest annual rate in five years
in June, mortgage lender Nationwide said on Wednesday.
Nationwide said the annual increase remained in the narrow
2-3pc range of the past 12 months and the lender still expected prices to rise
by only 1pc in 2018.
Britain's housing market has slowed since the 2016 referendum
decision to take the country out of the European Union. Eight months before
Brexit is due to happen, Prime Minister Theresa May has still to agree with the
EU about Britain's future trading relationship with the bloc.
House prices across the
United Kingdom were on average 2.5pc higher than in July last year, faster than
growth of 2.0pc in June and above a forecast for a 1.9pc rise in a Reuters poll
of economists.
In monthly terms, prices rose
by 0.6pc in July from June, faster than a forecast of 0.2pc.
Nationwide
economist Robert Gardner said an expected interest rate hike by the Bank of
England on Thursday was likely to have only a modest impact on the housing
market because most mortgages issued in recent years were on fixed interest
rates.
However, around 12pc of
homeowners already spend more than 30pc of their gross income on their mortgage
and "for those, some of whom will be on variable rates, any rate rise will
be a struggle, even though the impact on the wider economy and most households is
likely to be modest", Mr Gardner said.
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