U.K. House Prices Fall 0.5% as Economic Concerns Weigh on Property Demand – Bloomberg

House prices dropped 0.5 percent from January to an average 160,118 pounds, the mortgage unit of Lloyds Banking Group Plc said in a statement in London today.

<a href=”https://www.guaranteedrental.org/”>guaranteed rent</a>

House prices dropped 0.5 percent from January to an average 160,118 pounds, the mortgage unit of Lloyds Banking Group Plc said in a statement in London today. Photographer: Paul Thomas/Bloomberg

U.K. house prices fell for a third month in four in February and retail sales declined as economic uncertainty weighed on Britons’ spending.

Home prices dropped 0.5 percent from January to an average 160,118 pounds ($252,600), Lloyds Banking Group Plc (LLOY)’s Halifax mortgage-lending unit said in a statement in London today. A separate report from the British Retail Consortium showed sales at stores open at least 12 months decreased 0.3 percent last month from a year earlier.

While inflation is cooling, a recovery in consumer confidence is being kept in check by government job cuts and concern about the impact of Europe’s debt crisis on Britain’s economy. Housing demand may come under further pressure after a property-tax exemption ends this month and Halifax, the U.K.’s No. 1 mortgage provider, and two other lenders move to raise interest rates for some of their home-loan products.

“It is hard to be optimistic about the house-price outlook,” said Ed Stansfield, a property economist at Capital Economics Ltd. in London. “With mortgage interest rates edging up again and unemployment still rising, the downward trend in prices is likely to become entrenched this year.”

The Halifax report also showed that in the three months through February, values were 1.1 percent lower compared with the previous quarter. From a year earlier, prices in the three- month period were down 1.9 percent.

The pound fell 0.6 percent against the dollar today and was trading at $1.5776 as of 10:43 a.m. in London.

London’s FTSE 100 Index fell 1 percent and global stocks dropped for a third day, the longest stretch in two months, as concern mounted the global economy is slowing. The euro-region economy shrank 0.3 percent in the fourth quarter, the European Union’s statistics office said today, confirming an estimate published on Feb. 15. That follows data yesterday that showed U.S. factory orders declined and China’s announcement of the lowest growth target since 2004.

The MSCI All-Country World Index (MXWD) lost 0.8 percent, while the Stoxx 600 Europe Index (SXXP) declined 1.2 percent, extending yesterday’s 0.6 percent fall. Standard & Poor’s 500 Index futures slipped 0.8 percent, indicating the benchmark gauge for U.S. stocks will slide for a third day.

Stocks are also under pressure as investors weigh Greece’s chances of avoiding a default by getting private creditors to accept a debt swap by a March 8 deadline. Finance Minister Evangelos Venizelos said yesterday Greece expects bondholders to accept the offer and is ready to force them to participate if necessary.

The private investors that so far declared their participation in the debt restructuring hold about 20 percent of the bonds involved, according to data compiled by Bloomberg from company reports.

Surveys this month indicate that the U.K. economy returned to growth in the first quarter after a 0.2 percent contraction in the last three months of 2011. Reports from Markit Economics showed manufacturing and services continued to expand in February, while construction output rose at the fastest pace in 11 months. Consumer confidence held at the highest since June last month, GfK NOP Ltd. said on Feb. 29.

Recent economic statistics have been “encouraging, suggesting that the U.K. may avoid slipping back into recession,” Halifax economist Martin Ellis said. “These developments are positive for the housing market outlook. Significant uncertainties, however, persist and the prospects for house prices during 2012 will, to a large extent, depend on events in the euro zone.”

Halifax said on March 4 it is increasing its standard variable mortgage rate by 0.49 percentage point to 3.99 percent due to higher funding costs. Royal Bank of Scotland Group Plc has raised the rate on two of its non-standard variable-rate mortgage products, while Banco Santander SA (SAN) has also increased the rate new customers will pay on four types of mortgages it offers through its “Abbey For Intermediaries” product line.

Other surveys reported that U.K. house prices rose last month, with Nationwide Building Society (UKNBAAMM) saying that values were up 0.6 percent on the month. Bank of England data showed that mortgage approvals rose to a two-year high in January.

<a href=”https://www.guaranteedrental.org/”>guaranteed rent</a>

Those figures partly reflect people looking to take advantage of a tax exemption for first-time buyers purchasing a home for less than 250,000 pounds before it ends this month.

Today’s BRC report showed the value of retail sales including stores open less than 12 months rose 2.3 percent in February from a year earlier. In the three months through February, food sales increased 1.9 percent on the year, while non-food sales fell 0.3 percent.

Elsewhere today, Australia’s central bank reiterated it has scope to cut interest rates as Europe remains a potential source of shocks “for some time yet.” The nation’s currency fell as much as 0.9 percent to its lowest level in more than a month against the U.S. dollar.

Governor Glenn Stevens and his board left the overnight cash-rate target at 4.25 percent, the Reserve Bank of Australia said in a statement in Sydney, using a phrase he employed last month by calling policy “appropriate for the moment.”

Bank of England policy makers will keep their benchmark interest rate at a record-low 0.5 percent this week and maintain their bond-purchase program after they expanded it last month to aid the recovery, surveys of economists show. The central bank will announce the decision at noon on March 8.

<a href=”https://www.guaranteedrental.org/”>guaranteed rent</a>

View the original article here