U.K. House Price Index eases in November, house price growth likely to slow gradually in 2018

The U.K. House Price Index eased in the month of November, and delivered a mixed message. The headline growth eased to 5.1 percent year-on-year, following the upwardly revised level of 5.4 percent year-on-year in October. Thus, it continued to be widely in line with its average in the past six months and considerably higher than implied by other similar housing market indicators in recent months.

For instance, the Rightmove asking prices index rose just 1.1 percent year-on-year in January, and the nationwide indicator was up 2.5 percent year-on-year in December, both rates close to the bottom of their recent ranges. In the meantime, the November surveyor’s survey from the RICS showed that confidence on the market dropped further towards the end of 2017. The headline indicator for prices pressures might fall below zero when the December survey is released later this week, noted Daiwa Capital Markets Research.

Thus, given the weakened consumer confidence and dropping real wages,  the above-5 percent house price growth rate recorded today looks surprisingly strong, and is likely to ease gradually in 2018 in spite of the fact that falling consumer price inflation should give slightly more breathing space for household’s budgets, added Daiwa Capital Markets Research.

At 18:00 GMT the FxWirePro's Hourly Strength Index of British Pound was bullish 77.0132, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -85.7226. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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