UK House Prices Slow From 18-Year High

House prices in Britain have slowed down after having increased at its fastest pace in March since 2004, although its growth rate remained in double digits.

Annual price growth in April slowed to 12.1 percent from 14.3 percent in March, U.K. mortgage lender Nationwide reported on Friday. Its monthly increase was at 0.3 percent, the slowest change since September.

Nationwide said a strong labor market that has been supporting house demand combined with a low supply of homes has put an upward pressure on prices.

“Nevertheless, it is surprising that conditions have remained so buoyant, given mounting pressure on household budgets which has severely dented consumer confidence,” said Robert Gardner, Nationwide’s chief economist.

However, pressures on wages which are failing to keep up with inflation are set to slow down the housing market in the quarters ahead, Nationwide warned.

“Moreover, assuming that labor market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates,” Gardner added.

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