U.K. House Prices Surge Most in Seven Months on Supply Shortage

(Bloomberg) -- U.K. home prices rose for a second month in October, helped in part by an ongoing lack of supply of properties for sale.

Mortgage lender Halifax said values rose 1.4 percent compared with a month earlier as the stock of homes available remained around a record low. From a year earlier, values in the three months to October were 5.2 percent higher. That's far below a peak of 10 percent annual growth in March this year, but still “robust,” it said in a statement in London on Monday

The monthly increase lifted average values to 217,411 pounds ($269,500).

The housing market has been stronger than many expected following the U.K.'s vote in June to quit the European Union. After the first interest-rate cut in seven years in August, mortgage approvals rose in September after slipping for most of this year, according to the Bank of England. The central bank said activity is being buoyed by positive consumer sentiment alongside record-low borrowing costs.

“Very low mortgage rates and a shortage of properties available for sale should help support price levels,” said Martin Ellis, an economist at Halifax.

The lender also said that activity levels “have softened compared with a year ago,” though sales have stabilized after distortions earlier in the year due a tax change.

--With assistance from Zoe Schneeweiss and Kristian Siedenburg

To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Lucy Meakin