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UK house prices jump 11.1 pct in 12 months to May - Nationwide
June 3, 2014 / 6:03 AM / 3 years ago

UK house prices jump 11.1 pct in 12 months to May - Nationwide

LONDON, June 3 (Reuters) - British house prices picked up more speed in May to rise at their fastest pace in annual terms in nearly seven years, according to data from lender Nationwide that could add to concerns about the risk of a housing bubble.

But there were other signs in the numbers that the pace of price growth in the housing market might be slowing.

House prices rose 11.1 percent last month compared with May 2013, the biggest jump since June 2007 and faster than a 10.9 percent increase in April.

In month-on-month terms, price growth slowed to 0.7 percent from a 1.2 percent rise in April, Nationwide said.

Economists in a Reuters poll had predicted prices would rise 10.9 percent in yearly terms and 0.6 percent month-on-month.

And over the three months to May, prices rose at their slowest pace since August last year, gaining 2.3 percent.

Bank of England Governor Mark Carney said last month that the housing market posed the biggest risk to the British economic recovery, due in large part to a lack of new home-building. The central bank is expected to take more measures, possibly this month, to control mortgage lending.

Nationwide chief economist Robert Gardner said it was too early to tell if a recent dip in mortgage approvals represented a slowing of the housing market due to the introduction in April of tighter checks on the affordability of mortgages.

“However, with mortgage rates close to all-time lows and labour market conditions continuing to improve, underlying demand for homes is likely to remain strong,” he said. (Reporting by William Schomberg; editing by Andrew Roche)

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