House prices in the United Kingdom appear to be resilient to the sluggish economic recovery in the country and continue to rise for the third straight month.
The Nationwide Building Society House Price index showed an increase in November to 0.4% from October, and were 1.6% higher than in November 2010. In the three months to November, prices were 0.2% higher compared with the three months to August this year.
The housing market has struggled to gain momentum as inflation and government spending cuts weaken consumer confidence and as Europe’s debt crisis pushes up bank funding costs.
“Given the challenging economic backdrop, much of the current resilience in house prices reflects the lack of supply on the market at present,” Nationwide’s chief economist Robert Gardner said.
“Moreover, many of the factors that underpin the demand for homes have deteriorated further in recent months,” he said, adding that unemployment has risen sharply in recent months while wage growth has been subdued, at 1.7% in the three months to September, compared with a U.K.