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British house prices surprisingly rise 0.9 pct in December

Xinhua, January 9, 2015 Adjust font size:

The latest Halifax house price index released on Thursday showed that British house prices surprisingly grew by 0.9 percent between October and November, the biggest month-on-month gain since July.

But the large gain hides a further cooling in the underlying growth rate.

House prices in the last three months of 2014 were 0.3 percent higher than in the previous three months. This quarterly rate of increase declined for the fifth consecutive month and was the lowest since November 2012, according to the Halifax, a lender under Lloyds Banking Group.

"The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer," said Martin Ellis, housing economist of the Halifax.

"We expect a further moderation in house price growth over the coming year with prices nationally predicted to increase in a range of 3 to 5 percent in 2015," Ellis added.

Matthew Pointon, Property Economist of the Capital Economics, holds a more optimistic view.

"The stamp duty reform, strong economic backdrop and further fall in mortgage rates all suggest that prices will outpace earnings once again in 2015 ... with gains of around 6 percent to 7 percent," Pointon said. Endit