U.K. Nationwide house prices rose 1.3% m/m in July, marking a third consecutive month of price increases and yet again surprising on the upside. The reading compares to our survey median for a 0.3% m/m increase and follows June’s 0.9% m/m rise. The y/y reading improved to -6.2% from -9.3%, the series smallest y/y decline since June last year. Data hence continue to suggest that the housing market is beginning to stabilize, though we still think it’s too early to talk about a market recovery, and might still see monthly declines in the second half of the year, as unemployment, weak consumer confidence and continued tight credit will keep a lid of house prices. Also note that with limited supply, house price data are based on a relatively small number of transactions, distorting price comparison.
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