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UK house price growth cools to 3-month low in August

[LONDON] British house price growth eased to a three-month low in August, adding to signs that the squeeze on household spending since last year's Brexit vote has led to a slowdown in the housing market, a survey showed on Tuesday.

Mortgage lender Nationwide said house prices rose 2.1 per cent year-on-year in August, slowing from 2.9 per cent in July and matching May's four-year low.

A Reuters poll of economists had pointed to annual growth of 2.5 per cent.

Britain's housing sector has slowed sharply since the vote in June 2016 to leave the European Union, when prices were growing by more than 5 per cent a year.

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"The moderation in price growth primarily reflects the squeeze on real wages and the slowdown in the pace that mortgage rates are falling," said Samuel Tombs, economist at consultancy Pantheon Macroeconomics.

"Prices likely will continue to struggle to rise much, given that inflation still has further to rise, consumer confidence has deteriorated sharply since June and lenders intend to reduce the supply of unsecured credit." Nationwide said house prices slipped 0.1 per cent in August compared with the previous month, after rising 0.2 per cent in July.

Other house price surveys have painted a similar picture.

The Royal Institution of Chartered Surveyors said British house prices rose at their slowest rate in over four years last month, while the number of sales slowed due to a limited supply of property and continued political uncertainty.

REUTERS

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