By Svenja O’Donnell
Jan. 7 (Bloomberg) -- U.K. house prices rose in December for a sixth month as low interest rates helped stoke demand for homes, Halifax said.
Prices increased 1 percent to an average of 169,042 pounds ($269,305) after rising 1.3 percent in November, the division of Lloyds Banking Group Plc said in a statement on the Regulatory News Service today. From a year earlier, values increased 5.6 percent.
The drop in interest rates “has helped to stimulate housing demand, albeit from a low base,” Martin Ellis, housing economist at Halifax, said in the statement. “The prospects for the market this year will depend on how the U.K. economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our current view is that house prices will be flat during 2010.”
The report adds to evidence that the economy is emerging from the recession. The Bank of England will today stick to its plan to buy 200 billion pounds of bonds and keep the benchmark rate at a record low as policy makers assess the strength of the recovery, economists say.
U.K. house prices rose for an eighth month in December, Nationwide Building Society said last week.
Prime minster Gordon Brown is seeking to capitalize on signs the U.K. economy is recovering from the worst recession on record. Both his Labour government and the opposition Conservatives battle to convince voters they are best placed to reduce Britain’s ballooning budget deficit while sustaining economic growth. The Conservatives have led in the polls for the past two years.
To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net.
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