(Bloomberg) -- Growth in U.K. home prices accelerated in November as the market overcame a stamp-duty surcharge and mortgage-approval rates picked up, though confidence slid to a three-year low.
Values rose 6.6 percent in November from a year earlier, according to data published by mortgage lender Halifax on Wednesday. Prices were up 0.2 percent on the month, the third consecutive increase, pushing the average cost of a home to 218,002 pounds ($275,000). Meanwhile, the supply of new homes remained historically “very low,” Halifax said.
So far, the housing market hasn't significantly suffered in the aftermath of Britain's vote to leave the European Union, due largely to a continued shortage in supply. It has started to recover from April's stamp-duty surcharge on properties for investment and rates of mortgage approval have climbed to a seven-month high, according to the Bank of England. But growth remains slow, with properties in the most luxury districts of London even seeing price declines.
“Heightened affordability pressures, resulting from a sustained period of house-price growth in excess of earnings rises, appear to have dampened housing demand,” said Martin Ellis, Halifax housing economist. “Very low mortgage rates and an ongoing, and acute, shortage of properties available for sale should help support price levels although annual house price growth may slow over the coming months.”
Halifax said that confidence in the U.K. housing market dropped, even though a majority still expects house prices to rise over the next year. Values were up 0.8 percent in the three months to November compared with the previous quarter.
To contact the reporter on this story: John Ainger in London at jainger@bloomberg.net. To contact the editors responsible for this story: Eddie Buckle at ebuckle@bloomberg.net, Jana Randow, Paul Gordon
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