UK House Price Growth Rises Despite Middle East Uncertainty
(RTTNews) - UK house prices logged a faster growth in April despite geopolitical tensions in the Middle East and rising energy prices, data published by Nationwide Building Society showed Friday.
House prices grew by more-than-expected 3.0 percent on a yearly basis in April, following an increase of 2.2 percent in March. Prices were expected to rise again by 2.2 percent.
On a monthly basis, house prices climbed unexpectedly by 0.4 percent but slower than the previous month's 0.9 percent increase. Prices were forecast to drop 0.3 percent.
"Despite the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has continued to regain momentum following the slowdown recorded around the turn of the year," Nationwide's Chief Economist Robert Gardner said.
"This is somewhat surprising given that indicators of consumer confidence have weakened noticeably," Gardner added.
Gardner noted that the housing market is likely being supported by the relative strength of household finances. Moreover, housing affordability improved steadily due to income growth outpacing house price inflation by a wide margin and a moderate fall in mortgage rates.
Despite the rise in market interest rates in recent months, the impact on housing affordability has been limited, he added.
The economist observed that the UK economy and housing market proved remarkably resilient in recent years. If the latest shock passes relatively quickly, and energy prices normalize in the quarters ahead, any near-term softening in the housing market will prove short lived, Gardner said.
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