Quentin D. Solano
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Quentin D. Solano in Breaking news,

U.K. House-Price Growth Slows to 10-Month Low on Rate Prospects

U.K. house prices grew at the slowest pace in 10 months in September as the prospect of higher interest rates deterred buyers.

The average value rose 0.5 percent, the least since November, Acadata and LSL Property Services said today. The average price increased 10.6 percent from a year earlier to 275,820 pounds ($445,000). Housing-market transactions may have dropped 9 percent from August, according to the report.

While Bank of England officials kept their key interest rate at a record low 0.5 percent yesterday, two policy makers have started to push for an increase and Governor Mark Carney said last month that the point at which the benchmark begins “to normalize is getting closer.”

There’s “some evidence of an adjustment,” said Peter Williams, chairman of Acadata. The prospect of a rate increase next year “may well explain why some of the steam has come out of the housing market,” he said.

The loss of momentum comes after gains in London powered prices to a record. BOE officials are counting on the Financial Policy Committee to contain risks emanating from the surge. The minutes of the FPC’s September meeting, at which officials asked for more powers to limit mortgage lending, will be published at 9:30 a.m. in London.

Over the last three months, the capital led annual gains, with prices rising 20.4 percent. All 10 regions tracked by Acadata posted increases on this basis, with the smallest in the north, which advanced 2.8 percent.

In a separate report today, Rightmove Plc and Oxford Economics forecast values will increase 30 percent by 2019.

The south east will jump 37 percent and London is set to gain about 33 percent, the predictions showed. The north west region will increase 24 percent, the slowest pace among the 10 regions tracked in the report.