U.K. Nationwide House Prices Rise for Seventh Month - UKCIG Property

U.K. house prices rose for a seventh month as the labor market showed signs of improvement and the recession eased, Nationwide Building Society said.

The average cost of a home increased 0.5 percent in November to 162,764 pounds ($266,916), the mortgage lender said in a statement today. Prices rose 2.7 percent from a year earlier. Home values are 13 percent lower than at their peak in October 2007.

Mortgage approvals rose to the highest level in 19 months in October, data showed yesterday. While Bank of England Governor Mervyn King said last week that the recovery isn’t “particularly strong,” he noted that unemployment has increased less than forecast.

“The outlook for the housing market remains crucially dependent on labor market conditions, and here recent developments have been somewhat more encouraging than might have been expected,” Martin Gahbauer, Nationwide’s chief economist, said in the statement. “The better-than-expected performance of the labor market has probably contributed to the surprise rebound in house prices this year.”

The pound rose 0.7 percent today to $1.6556 as of 10:31 a.m. today in London. The yield on the two-year gilt rose 2 basis points to 1.181 percent.

Job Creation

Mortgage approvals climbed to 57,324, the highest level since March 2008, the Bank of England said yesterday. Unemployment rose at the slowest pace in 18 months in October, and the number of people in work increased for the first time in 14 months between July and September, the Office for National Statistics said on Nov. 11.

JD Wetherspoon, the owner of more than 700 U.K. pubs, will open 250 pubs over the next five years, creating about 10,000 new jobs, the Watford, England-based company said today.

Other reports have also shown the housing market is recovering. Hometrack Ltd. said yesterday that U.K. house prices rose for a fourth consecutive month in November.

Bank of England officials say the economy is now expanding after a record six quarters of contraction.

U.K. manufacturing expanded less than economists forecast in November. A gauge based on a survey of companies fell to 51.8 from 53.4 in October, the Chartered Institute of Purchasing and Supply and Markit Economics said in a statement today in London. Economists predicted 54, the median of 27 forecasts in a Bloomberg News survey showed. Readings above 50 indicate expansion.

UKCIG Property News, December 2009