Data released by mortgage lender Nationwide showed on Wednesday that UK house prices recorded a modest growth in June. UK Nationwide house price index rose 0.2 percent m/m in June above forecasts for 0.0 percent. On an annual basis prices rose 5.1 percent, beating expectations for a 4.9 percent rise and compared to 4.7 percent in the previous month.
Economist Robert Gardener said it was too early to assess impact of Brexit on the housing market. The immediate impact is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers adopt a wait and see the short-term impact on financial markets and the economy at large.
House-builders have been among the stocks worst hit by the sell-off since Thursday’s vote to leave the EU. Shares in the UK’s four-largest house-builders have fallen between 28 and 37 per cent since the referendum. The decline has been fuelled by fears that uncertainty will prompt consumers to delay homebuying decisions, weighing on house prices, while longer-term economic weakness could also set in.
Seperate data showed that Bank of England mortgage approvals unexpectedly rose in May to 67,042. The rise in mortgage approvals defied economists’ expectations for a decline and compared to 66,205 in April. BOE said the effective interest rate on new mortgages remained at 2.41 percent in May, the lowest since the series began in 2004. Net mortgage lending rose 2.8 billion pounds in May, while consumer credit increased 1.5 billion pounds.
