- Simon Rubinsohn, chief economist at RICS
U. K. house prices increased at the slowest pace in a year in August, as prospects of higher interest rates have dampened buyers' confidence. According to the Royal Chartered Surveyors, monthly house price balance declined to +40, following the revised downwards July's gauge of +48. The reading is the lowest since last August and came in against experts' forecast for +47. The report also showed the number of agreed house sales declined for the first time since September 2012, but the overall picture shows a return to a less volatile market, with more stable price expectations over the coming months. Other surveys showed a mixed situation on the housing market, which BoE Governor has described as the biggest domestic threat to U.K.'s economy. The latest report by Halifax also showed the housing market cooled in August with prices rising but at a slower pace than in July. However, Nationwide last week said house prices soared 0.8% in August. According to the latest Bank of England credit data, the number of mortgage approvals rose to 66,569 in July, which was lower than a month before.
Bank of England Governor Mark Carney said earlier this week the bank may begin to hike interest rates next spring if the labour market continued to improve after the financial crisis. Carney also reiterated that once the rates start to rise, lifts will be gradual and slow and dependent on labour market data including earnings and slack.
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