UK house prices drop in June-Nationwide

LONDON: British house prices fell back in June with the annual pace of decline reaching its highest rate for almost three years as the economy remained weak with little sign of a bounce back, mortgage lender Nationwide said on Thursday.

House prices fell 0.6 percent in June after a rise of 0.2 percent in May, leaving prices 1.5 percent lower than a year ago, the lowest reading for annual growth since August 2009.

"The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near-term rebound," said Nationwide's chief economist Robert Gardner.

Nationwide said the outlook for house prices remained highly uncertain, with economic conditions likely to stay challenging.

But it said efforts by policymakers to boost credit to the economy and lower its cost should support demand, while the supply of housing remained constrained with construction failing to keep pace with the number of households being formed.

"Overall, this suggests a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months," Gardner added.

By REUTERS