UK house prices edge up but Brexit drag effect persists

LONDON (Reuters) – British house prices, which have almost flat-lined ahead of the continued Brexit drag effect, grew a bit more quickly in October, a survey from mortgage lender Nationwide showed.

House prices rose by 0.4% on the year, Nationwide said on Tuesday, the 11th month in a row that annual price growth remained below 1%.

A Reuters poll of economists had pointed to another rise of 0.2%, which would have matched September’s eight-month low.

Nationwide’s chief economist Robert Gardner said average prices rose by 800 pounds over the last 12 months, a sharp slowing compared with the 12 months to October 2016, just after the Brexit referendum, when prices jumped by 9,100 pounds.

Some measures of the housing market have shown prices falling recently in London and neighbouring areas.

Nationwide said in October alone, British house prices rose by 0.2%, also slightly stronger than forecasts of no change in the Reuters poll.

Gardner said Britain’s strong labour market – the silver lining of the economy before Brexit – and low borrowing costs were offsetting the drag from the uncertain economic outlook.

Gardner said:

“The question is whether this pattern will continue.”

The European Union agreed on Monday to delay the Oct. 31 Brexit deadline by up to three months and Prime Minister Boris Johnson said he would push on with his attempt to end Britain’s political paralysis with an election on Dec. 12.

($1 = 0.7778 pounds)

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