UK home prices: Rate of growth slows in June

UK home-price growth slowed in June as new mortgage regulations dampened activity and some of London's most expensive areas posted declines, a survey shows.

 

Values in England and Wales rose 0.7% from May, when they increased one per cent, according to data compiled by Acadata Ltd.

 

Prices gained 9.6% from a year earlier to GBP268,637 (S$571,450), the real-estate research firm and LSL Property Services plc said in a report yesterday.

 

Regulations introduced tougher mortgage affordability tests in April, under the Mortgage Market Review (MMR), and the Bank of England took action last month to limit riskier loans. Officials left the benchmark rate at a record low 0.5% on Thursday to underpin the recovery, counting on its macroprudential powers to prevent an unsustainable build-up of debt.

 

 

"There are new signs that growth is beginning to slow as we move into summer and following the changes brought about by the Mortgage Market Review," Richard Sexton, director of LSL's e.surv division. Still, "the housing market recovery continues to seep across the country beyond the capital".

 

In May, the latest month for which regional figures are available, prices in London surged an annual 15.6% to an average of GBP545,643.

 

In Hammersmith and Fulham, the fourth-most expensive London district, prices dropped 0.1% in May from April, to an average of GBP838,232.

 

In the City, the capital's financial area, they slumped 8.2% to GBP819,920. Values rose 3.8% in Kensington and Chelsea, Britain's priciest district with an average house price of GBP1.94 million, after a 28% surge in the past year.

 

Acadata estimates that housing transactions in England and Wales rose 10.3% in June from a year earlier to 73,750. They slid 6% from May.

Info source: Bloomberg

 

Click on the link below to get an "easy to understand" (at least to us) of MMR and how it will impact mortgage market participants:

http://www.glovers.co.uk/news_article490.html