Alexa
  • Directory of Taiwan

Bank survey says UK house prices declined for second straight month

Bank survey says UK house prices declined for second straight month

House prices in the United Kingdom fell for the second straight month in December, a further sign that higher interest rates and tightening credit markets are cooling the British economy, a major mortgage lender reported Friday.
House prices fell by a seasonally adjusted 0.5 percent in December, following a drop of 0.8 percent in November, the Nationwide Building Society said.
That still left house prices 4.8 percent above year-earlier levels in December, down from 6.9 percent in November, the report said. The average house price rose in 12 months by 8,334 pounds (euro11,413 US$16,572) to 182,080 pounds (euro249,346 US$362,070 ), the report added.
The Financial Times' house price index reported earlier this month that house prices in the U.K. were up 9.1 percent for the year though easing from double-digit rates earlier in the year.
The Halifax, another big mortgage lender, and the Royal Institution of Charter Surveyors earlier this month each predicted that house prices will be essentially flat in 2008.
"Most indicators now show that demand is responding to the pressures of weak affordability, past increases in interest rates and the lower house price expectations that we had expected to take hold earlier in the year," Fionnuala Earley, Nationwide's chief economist, said in a statement.
"However, the turmoil in the financial markets resulting from the U.S. subprime mortgage issue and the problems experienced by a U.K. mortgage bank have swiftly added to the pace of changing sentiment in latter months."
Northern Rock, another British mortgage lender, had to turn to the Bank of England for emergency loans in September after the U.S. subprime crisis forced up rates on the short term borrowing which supported Northern Rock.
Concern about a cooling economy led the Bank of England to cut its base lending rate by a quarter-point to 5.5 percent.
The bank lifted rates five times between July 2006 and July 2007 to a six-year high of 5.75 percent in a bid to counter soaring inflation along with the booming housing market.
___
On the Net:
http://www.nationwide.co.uk/hpi/historical/Dec_2007.pdf


Updated : 2021-04-21 04:54 GMT+08:00