UK property costs to rise four-six pct in 2016 – Halifax

LONDON Dec 4 British residence cost are probably to rise much more gradually next year, with costs growing by among four and six % compared with growth of nearly 10 % in the previous 12 months, mortgage lender Halifax forecast on Friday.

Final year, Halifax mentioned house rates would rise by 3-5 % in 2015. But their own figures have shown development of more than twice that in the year to October.

“Property rates look costly compared to incomes but valuations are supported by the low levels of house for sale, low levels of housebuilding, and exceptionally low interest rates,” Halifax housing economist Martin Ellis said.

The failure of the Bank of England to increase interest prices, as markets had anticipated this year, was a important reason why house costs had risen more rapidly than forecast, Ellis added.

Other information show a slower price of improve than Halifax’s numbers. The Workplace for National Statistics has reported a six.1 % rise for the year to September.

Economists polled by Reuters final week predicted on typical that residence rates would rise by 4.three percent next year and 3.9 % in 2017.

Bank of England chief economist Andy Haldane final month named the British housing industry “broken”, blaming a lengthy-term failure of building to maintain up with demand.

Final year, the BoE restricted high loan-to-earnings mortgages for residential purchases. It is seeking now at no matter whether to advise curbs on ‘buy-to-let’ mortgages favoured by small property investors.

But the central bank has stopped brief of deeming the cost rises a significant threat to monetary stability.

Halifax is element of Lloyds Banking Group and is one particular of Britain’s biggest mortgage providers. (Reporting by David Milliken editing by William Schomberg)