U.K. house prices were little changed this month and values may decline “modestly” over the next year because of subdued wage growth, Nationwide Building Society said.
The average cost of a home was 163,853 pounds ($262,300) in November, the Swindon, England-based customer-owned lender said in an e-mailed statement today. From a year earlier, prices declined 1.2 percent.
“The predominant theme remains one of stability,” Robert Gardner, chief economist at Nationwide, said in the statement. However, “house prices are likely to remain broadly flat or decline modestly over the next 12 months.”
Britain’s uneven economic recovery has restrained the property market, as have tight lending conditions at banks, which the Bank of England is trying to rectify with its Funding for Lending Scheme. Still, data yesterday showed mortgage approvals rose to a nine-month high in October and Nationwide said that a better-than-expected labor market performance is contributing to a stabilization of the housing market.
The economy will “gradually gather pace in the years ahead,” Gardner said. Its ability to generate jobs “will remain a key determinant of housing market conditions.”
Mortgage approvals rose to 52,982 last month from 50,415 in September, according to Bank of England data. That’s the highest since January.
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