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LONDON, April 28 British house prices fell for a
second month in a row in April, suggesting households are
feeling the pinch from rising inflation since last year's Brexit
vote and low wage growth, data from mortgage lender Nationwide
showed on Friday.
Nationwide said house prices declined by a monthly 0.4
percent following a fall of 0.3 percent in March which had been
the first drop since mid-2015.
In annual terms, prices were 2.6 percent higher, the weakest
increase in almost four years.
Economists polled by Reuters had expected house prices to
rise by 0.1 percent in April from March and by 3.3 percent in
Britain's households are facing a loss of spending power due
to rising inflation - aggravated by the fall in the pound since
last year's referendum decision to leave the European Union -
which is starting to outpace wage growth.
A survey published earlier on Friday showed British
consumers were their most gloomy in four months in April as they
weighed up the outlook for the economy and their finances ahead
of Brexit and June's general election.
The last time Nationwide reported two consecutive months of
house price falls in monthly terms was in mid-2012.
"While monthly figures can be volatile, the recent softening
in price growth may be a further indication that households are
starting to react to the emerging squeeze on real incomes or to
affordability pressures in key parts of the country," Nationwide
economist Robert Gardner said.
The slowdown in the housing market might also reflect the
strong pace of price increases with a typical home now costing
6.1 times average earnings, close to an all-time high of 6.4
times in 2007, before the financial crisis, Gardner said.
However, low levels of building and a shortage of properties
on the market would provide some support for prices.
"We continue to believe that a small increase in house
prices of around 2 percent is likely over the course of 2017 as
a whole," Gardner said.
(Writing by William Schomberg; editing by Richard Lough)