U.K. House Prices Edge Higher in Market Trapped by Brexit

(Bloomberg) --

U.K. house prices edged up marginally, according to mortgage lender Halifax, which said the market is stuck in a “flat trend.”

In the three months through August, values increased 0.1%, having falling in the previous two periods, it said on Friday. That put the average price at 233,541 pounds ($287,255).

The property market has been suffering from the uncertainty surrounding Britain’s departure from the European Union, but recent figures suggest that labor market strength is helping it to weather the Brexit storm. The Bank of England said mortgage approvals jumped to the highest in two years in July.

“While ongoing economic uncertainty continues to weigh on consumer sentiment -- with evidence of both buyers and sellers exercising some caution -- a number of important underlying factors such as affordability and employment remain strong.” said Russell Galley, managing director at Halifax.

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Galley added that the market is showing a “degree of resilience for the time being.”

The increase in real house prices since 2000 is “almost entirely” due to lower interest rates, according to a separate blog post by BOE economists published Friday. Scarcity of housing played a negligible role nationally, they found.

--With assistance from Lucy Meakin.

To contact the reporter on this story: Eddie Spence in London at espence11@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Andrew Atkinson

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