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U.K. House Prices Return to Growth Amid Signs of London Recovery

21 September 2018

U.K. house prices rebounded in September amid signs of a pickup in sales of London’s most expensive properties.

Asking rices rose 0.7 percent this month, matching the average for September since 2011, according to property website Rightmove’s housing index, which isn’t seasonally adjusted. In the capital, there was a 6 percent rise in sales agreed to for homes costing 750,000 pounds ($984,000) or more compared to the same last month last year, the firm said.

The increase left the average national price at 304,061 pounds, up from 301,973 the previous month. There was also more positive news in a separate report from Acadata, which showed prices rose 0.1 percent in August, ending their longest losing streak since the financial crisis.

The surveys provide some rare good news for the U.K.’s housing market, which has been struggling after a three-decade boom. Slower economic growth, government tax changes and the U.K.’s exit from the European Union have all been blamed for the slowdown, which has been felt most acutely in the capital.

Carney’s Scenarios

Brexit remains a big question mark hanging over the market. In a meeting of senior government ministers last week, Bank of England Governor Mark Carney was said to have laid out the worst-case economic scenarios for the U.K. crashing out without a deal, which included higher mortgage rates and a 35 percent crash in house prices. The BOE has previously run stress tests showing that banks could cope with such a situation.

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