Tuesday June 30, 07:15 AM
UK house prices up for 2nd month in June-Nationwide
By Sumeet Desai and Fiona Shaikh
LONDON, June 30 (Reuters) - British house prices rose for
the second month running in June, leaving them less than 10
percent down on a year ago, the Nationwide building society said
on Tuesday, in another sign the market may be stabilising.
The mortgage lender said house prices rose 0.9 percent this
month, taking the annual rate of decline to 9.3 percent -- the
smallest fall since July 2008 -- from 11.3 percent in May.
And prices in the three months to June were 0.9 percent
higher on the previous three months, the first positive reading
since December 2007, with the average house price now standing
at 156,442 pounds.
'House prices have risen in three of the last four months,
suggesting that the improvement that began to show up in March
represents more than just statistical noise,' said Martin
Gahbauer, Nationwide's chief economist.
Earlier, a survey by GfK/NOP showed consumer confidence
hitting its highest level in 14 months in June as people became
more optimistic about their finances -- the latest in a long
line of indicators suggesting the worst is over for the economy.
But policymakers are still being circumspect and not
declaring victory yet over Britain's first recession since the
early 1990s -- figures due at 0830 GMT are expected to show the
economy shrank 2.1 percent in the first three months of 2009.
Nationwide also remained cautious, pointing out the
stabilisation in prices had come despite very low house purchase
activity as there had been a corresponding drop in the stock of
property for sale.
The latter is probably a result of potential sellers and
builders holding on to their properties waiting for an upturn
but Nationwide said that would have to change.
'Abnormally low supply levels are unlikely to last forever,
as the recent price increases should make previously hesitant
sellers feel more confident about marketing their properties,'
Gahbauer said.
'Additional supply is also likely to come from homeowners
who see their financial position impacted by higher unemployment
and lower incomes.'
Credit constraints also remain a problem curbing buying.
Mortgage lending in May rose by its lowest amount on record,
just 324 million pounds, a tenth of the increase a year ago,
according to Bank of England data.
And while mortgage approvals have ticked higher, they remain
well below the level consistent with a sustainable recovery.
'The stabilisation of house prices is a welcome surprise
that did not seem likely at the beginning of the year,' said
Gahbauer.
'However, there are still considerable headwinds facing the
demand side and until we see a more robust recovery in house
purchase activity, it is too early to be confident about a
full-scale recovery of prices.'
(Editing by Andy Bruce)
Keywords: BRITAIN NATIONWIDE
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