LONDON (Reuters) - British house prices rose strongly for a fourth consecutive month in August, mortgage lender Nationwide said on Friday, citing a recovery in the economy and government measures onto help people on the property ladder.
House prices rose 0.6 percent this month from July, in line with economists’ forecasts, after a revised 0.9 percent rise in July, Nationwide said.
The annual rate slowed to 3.5 percent from 3.9 percent.
But in the three months to August, compared with the three months to the end of July - which many consider a better gauge of the underlying trend - prices rose by 1.4 percent, its strongest pace since mid-2010.
“Consumer confidence has increased significantly in recent months, thanks to further modest gains in employment and signs that the UK economy is finally gathering momentum,” said Nationwide’s chief economist Robert Gardner.
He said programs by the Bank of England and the government to spur lending were also helping first-time buyers.
Nationwide warned that property prices could become stretched if demand keeps on outstripping supply. House building in Britain is running well below the 250,000 homes needed each year to keep pace with a growing population.
Bank of England Governor Mark Carney said on Wednesday the central bank was “acutely aware” of the risk of an overheating property market but tools other than interest rates were best placed to deal with any threat to the economy.
Reporting by Christina Fincher; Editing by Hugh Lawson