UK house price growth accelerates despite Brexit

British house price rises picked up speed in August and households recovered some confidence which had plunged after June’s Brexit vote, according to surveys that added to signs of calm among consumers after the unexpected referendum result.

However, the increase in house prices was largely driven by a shortage of homes on the market and the outlook depended on the longer-term impact on the UK economy of the vote to leave the EU, mortgage lender Nationwide said.

Prices rose 5.6% compared with the same month last year, faster than July’s 5.2% annualised growth. Economists had expected UK house prices to rise 4.8%. In monthly terms, house prices rose by 0.6%, from a rise of 0.5% in July.

“The pick-up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months,” Nationwide economist Robert Gardner said. The Bank of England said on Tuesday that, in July, mortgage approvals fell to their lowest level since January 2015.

Mr Gardner also said demand for housing had fallen, hit by the introduction in April of a new tax on homes bought by landlords, but the drop appeared to have been matched by weak numbers of homes being put up for sale.

“What happens next on the demand side will be determined, to a large extent, by the outlook for the labour market and confidence amongst prospective buyers,” he said.

A survey published earlier yesterday showed UK consumer morale in August recovered some of its post-Brexit slump. The improvement was in keeping with recent data suggesting consumers have remained resilient after the June 23 referendum.