U.K. home prices continue to show subdued growth, rising at an annual rate of 2.4% in May, according to one of the country’s biggest mortgage lenders.
By year’s end, national home prices are predicted to rise only 1%, as tight household budgets and economic uncertainty discourage buyers and sellers from entering the market, according to a monthly index from Nationwide Building Society released Thursday.
“There are few signs of an imminent change,” said Robert Gardner, Nationwide’s chief economist, in the report. “Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.”
The average home price in May was £213,000 ($US283,207), a slight drop from the £213,618 ($US284,029) recorded in April, according to Nationwide, which draws the data from its own monthly mortgage lending.
For roughly a year, annual price growth has been at its lowest levels since 2012-13, when the the market experienced similar flatlining following the last global financial crisis.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labor market,” Mr. Gardner said.
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U.K. homeownership has stagnated over the past 20 years, with most of the growth in housing stock rented out by private landlords. Since 2007, the number of privately rented dwellings increased 50%, according to the report.
Even as mortgage rates remain low by historical standards, Mr. Gardner said, “subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity.”
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