(Bloomberg) -- U.K. house-price growth accelerated in the last three months, reflecting the continued imbalance of supply and demand in the property market.
Prices between between August and October were 2.3 percent higher than in the previous three months, the lender said on Tuesday -- the fastest growth since January. On an annual basis, prices increased 4.5 percent, the most since February.
Despite the pickup, confidence in housing is falling. According to Halifax, sentiment is now at its lowest in almost five years. Supply is also declining, with the number of new sellers falling for the 19th consecutive month in September.
The property market has been cooling in recent years, with London the worst hit after years of outperformance, particularly in prime districts of the city. According to Nationwide Building Society, annual home-price inflation is running about 2.5 percent.
The Halifax report comes less than a week after the Bank of England raised interest rates for the first time in a decade in an attempt to curb inflation. While a fifth of mortgage holders never experienced a rate hike before, the BOE expects the impact of the tightening will be gradual overall because so many borrowers are tied to fixed rates.
“Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand,” said Russell Galley, managing director at Halifax Community Bank. “That said we do not anticipate the base rate rise will be a barrier to buying a house.”
To contact the reporters on this story: Fergal O'Brien in London at fobrien@bloomberg.net, David Goodman in London at dgoodman28@bloomberg.net.
To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Lucy Meakin
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