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UK House Prices Beat Expectations in January: Nationwide

In News, World
January 31, 2024

LONDON:
British house prices rose more than economists had expected in January, adding to signs that the squeeze from high-interest rates is beginning to ease, figures from mortgage lender Nationwide Building Society showed on Wednesday. Nationwide said house prices in January increased by 0.7% from the month before after being flat in December, beating economists’ forecast in a Reuters poll for a 0.1% rise.

“There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down. This follows a shift in view amongst investors around the future path of Bank Rate,” Nationwide chief economist Robert Gardner said. Prices in January were 0.2% lower than a year earlier – the smallest annual decline since January 2023 – after forecasts for a 0.9% decline and a 1.8% fall in December.

Looking at the three months to the end of January, prices rose by 1.1%, their fastest since July 2022, shortly before rising Bank of England interest rates and temporary bond market turmoil under Prime Minister Liz Truss hit the market. The Bank of England is expected to keep Bank Rate at 5.25% on Thursday, but may lower some of its inflation forecasts, which economists think will give it scope to start to cut interest rates from the middle of this year.