UK house price growth accelerates unexpectedly in February – Nationwide
LONDON (Reuters) – UK house price growth accelerated unexpectedly last month, Nationwide mortgage lender said on Tuesday, defying expectations of a slowdown as Finance Minister Rishi Sunak prepares new measures budget to stimulate the market.
House prices rose 6.9% in annual terms in February from 6.4% in January, Nationwide said, especially the forecast of a Reuters poll of economists which had indicated a slowdown to 5.6%.
In February alone, prices rose 0.7%, offsetting more than a 0.2% drop in January and defying expectations of a 0.3% drop.
Nationwide said the outlook for the housing market is particularly uncertain at this time, with the possibility that it will be further bolstered by Sunak when he presents his annual budget on Wednesday.
But the market could slow due to a weakening labor market, the lender said.
Sunak is expected to extend a temporary reduction in taxes on real estate purchases until June and announce a new mortgage guarantee program for first-time buyers, according to media reports.
Samuel Tombs, an economist at consultancy Pantheon Macroeconomics, said he doubted a new program would solve the affordability issues facing first-time buyers.
“Nonetheless, our forecast for house prices to fall by around 2% this year now looks too pessimistic, although we will wait for the release of warranty program details before providing new numbers,” Tombs said.
Reporting by Andy Bruce; edited by Michael Holden