House prices show biggest monthly rise since 2010

City A.M. Reporter
British house prices showed their strongest monthly rise in more than two-and-a-half years this month, mortgage lender Nationwide said today, in contrast to a generally weak picture for the country's property market and broader economy.

Nationwide said house prices rose by 1.3 per cent in August after falling a downwardly revised 0.8 per cent in July. That left prices 0.7 per cent lower than a year earlier.

Bank of England data yesterday had shown a bigger-than-expected rise in net mortgage lending in July, but the number of mortgage approvals stayed weak and Nationwide cautioned against reading too much into August's data.

"Monthly price changes have been impacted by a number of one-off factors this year," said Nationwide's chief economist Robert Gardner. "Nevertheless, the fact that the annual pace of house price decline moderated ... provides evidence that conditions remain fairly stable."

Growth in employment in recent months, despite a mild recession which started late last year, was a major factor behind the limited decline in house prices, Gardner added.

Other economic news today was less cheery, with the British Chambers of Commerce sharply downgrading its economic forecasts for this year and next, and GfK NOP reporting continued weakness in consumer confidence.