UK house prices grow at fastest rate in nearly three years - Nationwide

LONDON (Reuters) - British house prices grew at their fastest annual rate for nearly three years last month, mortgage lender Natonwide said on Friday, citing a stronger economy and government measures to aid home purchases.

Nationwide said that the monthly rate of house price increases jumped to 0.8 percent in July from 0.3 percent in June, beating economists' forecasts of a 0.4 percent rise.

House prices are now 3.9 percent higher than last July, the strongest annual rise since August 2010 and again stronger than forecast.

"Signs of a modest improvement in wider economic conditions and further modest gains in employment are likely to be lifting buyer sentiment," said Nationwide's chief economist Robert Gardner.

"An improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures such as the Funding for Lending and Help to Buy schemes, are also boosting the demand for homes," he added.

Britain's government launched the two schemes over the past year in an effort to stimulate economic growth, which it believes has been hampered by restricted bank lending since the financial crisis.

Growth has picked up since the start of the year, and earlier on Friday a leading economic think tank, the National Institute of Economic and Social Research, revised up its forecasts to predict 1.2 percent growth this year.

Nationwide said house prices are now 12 percent above a low touched shortly after the financial crisis, but are still 10 percent below the all-time highs which it reported in late 2007.

The lender said building activity remained subdued which meant housing was in short supply.

(Reporting by David Milliken; editing by Ron Askew)

Source: http://news.yahoo.com/uk-house-prices-grow-fastest-rate-nearly-three-060457530.html

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