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UK house prices rebound after worst streak in eight years

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UK house prices rebounded in June, halting the worst streak for the market in eight years, according to Nationwide Building Society.

[LONDON] UK house prices rebounded in June, halting the worst streak for the market in eight years, according to Nationwide Building Society.

Values rose 1.1 per cent from the previous month, the most since April 2015, taking the annual rate of change up to 3.1 per cent. The average value last month was 211,301 pounds (S$373,711).

The increase followed three months of falling prices - the longest stretch since early 2009 when the economy was in the midst of a deep recession. Values fell 0.1 per cent between April and June, the first decline in a calendar quarter for almost five years.

"Despite the pickup, gains still look likely to moderate further this year, though the dearth of would-be sellers is likely to keep a floor under prices," said Bloomberg Intelligence economist Dan Hanson.

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It is "unclear" whether the June gains reflect strengthening demand and continued low mortgage rates, or the lack of homes on the market, with the number of properties on estate agents' books remaining close to all-time lows, Nationwide's Chief Economist Robert Gardner said.

Due to the shortage of properties and subdued building activity, values will still rise this year, he said, predicting an average gain of about 2 per cent. Even so, he warned that Britain's negotiations to leave the European Union may weigh on activity.

"Given the ongoing uncertainties around the UK's future trading arrangements, the economic outlook remains unusually uncertain," he said. "Housing market trends will depend crucially on developments in the wider economy." London's annual price growth cooled to 1.2 per cent, the slowest pace for the capital since 2012.

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