GBP/USD – Holiday downtick in house prices

on Aug 19, 2013
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**iNVEZZ.com, Monday 19 August:**

Rightmove’s UK House Price Index for August m/m showed a 1.8 percent downtick after marginal growth of 0.3 percent in July. Year-on-year the indicator shows an increase of 5.5 percent compared to the prior rise of 4.8 percent. The recovery in the housing market has been boosted by growth of 10.2 percent in London real estate prices over the past year in contrast to the average rise of just 2.8 percent in the rest of the UK.

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This has been the first negative monthly change in average asking prices since the start of 2013.

According to Miles Shipside, Rightmove director and housing market analyst, “A holiday season price dip is the norm in August, with an average drop in the last five years of over 2%.” Mr Shipside recognises that in 2013 the national average asking price is up by more than £20,000 as a result of the uptrend in demand. However he acknowledges that demand outstrips supply of properties and the UK government needs to ensure more houses come on to the market with the roll-out of stage two of the Help to Buy stimulus. In the first eight months of this year the number of new houses entering the market has increased only by 0.2 percent compared to the same period in 2012. As the Rightmove director admits, this lag between supply and demand ‘’could cause a short-term step-up in house price inflation over and above what is currently being seen.’’ Sustainable growth in property prices will be determined by the supply side and that is why the Help to Buy government programme is the key to keep the market sustainability.

Today sterling is trading in a tight 28-pip range and currently the pound is holding around 1.5634 or just 0.03 percent up intraday.

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Forex: Weekly outlook: European Flash PMI’s on ThursdayGBP/USD – Fear of rising interest rates fuelling US housing stats

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http://nvz.bz/1bNyfTz

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