British house prices still rising

PUBLISHED : Wednesday, 05 March, 2014, 5:16am
UPDATED : Wednesday, 05 March, 2014, 5:37am

House prices in the United Kingdom rose last month as the property market continued to get a boost from low borrowing costs and easier access to mortgages.

Nationwide Building Society said home values increased 0.6 per cent in February, a 14th monthly increase, reaching an average £177,846 (HK$2.3 million). From a year earlier, prices were up 9.4 per cent.

"Demand continues to be supported by record-low interest rates, improved credit availability and rising consumer confidence thanks to the healthy gains in employment," said Robert Gardner, Nationwide's chief economist.

"Price growth is being supported by the fact that the supply of housing remains constrained."

Barratt Developments, the UK's second-largest homebuilder by market value, said its first-half profit almost tripled as the improving economy fuelled demand. Persimmon, the biggest homebuilder, last month reported a 54 per cent surge in full-year profit.

Bank of England governor Mark Carney plans to keep the benchmark interest rate at a record-low 0.5 per cent, and says if action is needed to cool housing, the Financial Policy Committee will take the lead. It showed a willingness to act last year, when it announced it was ending some incentives for mortgage lending.