UK house prices rise at fastest pace since November 2018 – Nationwide

LONDON (Reuters) – UK house prices rose in January at their fastest annual rate since November 2018, adding to signs of a modest pick-up in the housing market and broader economic confidence since December’s election, industry figures showed on Wednesday.

Nationwide Building Society said annual house price growth in January increased to 1.9% from December’s 1.4%, above all forecasts in a Reuters poll of economists, in what it called a “modest pick-up”.

Nationwide’s chief economist, Robert Gardner, said:

“Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”

House prices in January alone rose by 0.5% on the month, up from 0.1% in December and above the average forecast of a 0.3% rise.

The Bank of England will need to weigh up signs of a recent economic pick-up against an overall sluggish picture in official measures of growth at the end of last year, when it decided whether to announce an interest rate cut on Thursday.

Howard Archer, economist with EY ITEM Club, said:

“There is compelling evidence that the housing market has got an initial leg-up from increased optimism and reduced uncertainties following the decisive general election result as well as greater near-term clarity on Brexit.”

Archer said he was raising his forecast for British house price gains in 2020 to 2.8% from 2.0% as a result.

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