U.K. house prices rose the most in nine months in May, according to Acadametrics Ltd., which said the gain may not signal the start of a rebound by the country’s property market.
The average price of a home in England and Wales climbed 0.5 percent from April to 223,207 pounds ($347,100), Acadametrics and LSL Property Services Plc (LSL) said in a report in London today. From a year earlier, values gained 1.9 percent.
Further gains may be limited by higher mortgage rates as banks’ funding costs increase and by mounting threats to the economy from the sovereign debt crisis in Europe. Acadametrics Chairman Peter Williams said the housing market may struggle to return to a “more buoyant state” as banks curtail lending to improve their balance sheets.
“Given the very considerable uncertainty that now exists around the euro and is feeding into wider global financial markets, it is hard to anticipate when a more positive home ownership market may exist,” he said in the report.
Out of the 10 regions tracked by Acadametrics and LSL, all apart from London, Wales and East Midlands saw their average values decline in the last three months compared with the same period a year earlier.
Acadametrics and LSL said the number of transactions in May was probably 60,000, which is 67 percent of the long-term average for the month. The groups combine initial transaction data from the Land Registry and results from other price measures for their index of values.
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