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UPDATE 1-British house price growth slows in July - Nationwide
July 31, 2014 / 7:16 AM / 3 years ago

UPDATE 1-British house price growth slows in July - Nationwide

* UK house price growth cools in July

* Nationwide cites tougher mortgage checks

* But slowdown may prove temporary (Adds more detail, economist reaction)

By Andy Bruce

LONDON, July 31 (Reuters) - British house prices stagnated in July after strong growth last month, cooled by tougher checks on mortgage lending, a survey from lender Nationwide showed on Thursday.

House prices gained just 0.1 percent month-on-month, the slowest pace since April last year and down from 1.0 percent in June.

Economists polled by Reuters had expected a rise of 0.5 percent.

The survey is the latest to suggest rampant house price growth has started to ease.

“At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures,” said Nationwide chief economist Robert Gardner, referring to tougher checks on mortgage affordability introduced in April.

“(But) with the labour market strengthening, mortgage rates expected to remain low and consumer confidence rising, activity is likely to recover in the months ahead.”

Bank of England Deputy Governor Ben Broadbent said in a Bloomberg interview published earlier on Thursday, however, that “the edge is coming” off Britain’s housing.

The BoE, which is keeping a close eye on Britain’s fast-recovering housing market, announced measures last month to prevent a build-up of risky home loans.

On an annual basis, house prices rose 10.6 percent compared with June’s nine-year high of 11.8 percent, again slower than the 11.3 percent forecast by economists, Nationwide said.

“One should be careful about interpreting too much from July’s marked slowdown in house prices,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“We take the view that house prices will keep on clearly rising over the coming months but there will be some moderation from the recent peak levels.”

A separate survey on Tuesday showed consumer sentiment in Britain fell in July for the first time since in six months, the latest survey to suggest Britons are feeling less upbeat about the economic recovery. (Reporting by Andy Bruce, editing by Jeremy Gaunt)

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