UK house prices hold steady, official data says
(ShareCast News) - UK house prices are holding steady, according to official house price data released on Tuesday.
The official house price index increased 1.1% month-to-month in July, which saw the yearly growth rate remain steady at 5.1%, better than the consensus forecast of 4.8%.
New build prices were reported to have risen 17.7% year-on-year, with prices for pre-owned properties up by 4.3%
According to recent data from Nationwide, house prices rose 2.9% on the year in July, while Halifax put year-on-year growth at 2.5%.
The much stronger growth in the official measure of house prices than other data made some economists suspicious.
"In theory, the official measure of prices should be the best barometer because it is based on all housing transactions, regardless of the purchase method or whether the property is new or old," said Pantheon Macroeconomics' Sam Tombs.
"But the official data often are revised substantially, as only a small sample of properties-especially for new build houses-are available for the most recent month," he added, saying the discrepancy between new build and pre-owned properties was "hard to believe".
"Never before has there been such a disparity between new build and pre-owned house price growth. As a result, we are more inclined to trust the plethora of other indicators that suggest that price growth is muted. Looking ahead, we expect house prices to rise only slowly over the next year as inflation continues to exceed wage growth, Brexit risk makes some households reluctant to make long-term financial commitments and as lenders' financing costs rise when the Term Funding Scheme is closed in February 2018."