Financial News: UK Nationwide House Price Growth Accelerates In March

UK Nationwide House Price Growth Accelerates In March

(RTTNews) - UK house prices increased at a faster pace in March suggesting that the housing market regained some momentum, data from the Nationwide Building Society showed Tuesday.

The annual growth in house prices rose to 2.2 percent in March from 1.0 percent in February.

On a monthly basis, house prices moved up 0.9 percent, much faster than the 0.3 percent increase seen in February. Economists had forecast prices to remain flat.

"The pickup in house price growth suggests that the market had regained momentum after the slowdown recorded around the turn of the year," Nationwide's Chief Economist Robert Gardner said.

However, he added that the sharp rise in global energy prices in response to developments in the Middle East represents a significant shock to the global economy, clouding the outlook.

Nationwide expects economic growth to be slower and inflation higher than previously expected in the near term. The impact will depend on the duration of the shock as well as the policy response, Gardner noted.

Market expectations for the future path of the interest rate have shifted dramatically with three interest rate increases expected over the next twelve months compared to two rate cuts being anticipated before the strikes on Iran.

Nationwide anticipates housing market activity to soften as rising interest rates would dent housing affordability. Further, uncertain outlook and the prospect of rising energy costs would adversely affect consumer sentiment.

Earlier this month, the Bank of England maintained its interest rate at 3.75 percent but raised market expectations for a rate hike as policymakers said they stand ready to act as necessary to bring inflation back on track.

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