UK house prices jump to record in March

by BLOOMBERG

LONDON • UK home prices jumped to a record in March, though the larger picture of a slowdown is unchanged, according to Halifax.

Values surged 1.5% from February, to an average £227,871 (RM1.25 million), the lender said in a report published yesterday. But over the first quarter, prices were stagnant, it said, adding that activity has “softened” compared to a year ago.

The annual rate of growth in the three months through March rose to 2.7%. Halifax MD Russell Galley said it will probably remain around 3% in the coming months.

While mortgages are the most affordable in a decade, according to Halifax, home-loan approvals have weakened and sales have been flat. It said prices will still be supported by a shortage of properties for sale and the fact that unemployment is the lowest in four decades.

Data from Nationwide Building Society published last month showed that values fell for a second month in March, and the Bank of England posted a larger than forecast decline in mortgage approvals. That’s all likely the result of household finances being under pressure and real incomes falling.

Meanwhile, the fund managing the wealth of the billionaires who own Lego A/S wants to buy more London real estate.

Undeterred by Britain’s plan to exit the European Union, the US$16 billion (RM61.94 billion) Kirkbi A/S fund earlier this year bought the Porter’s Wharf

office property in London’s King’s Cross district, marking its third real estate investment in the UK capital, it told Bloomberg.

“Some investors, including us, are a bit nervous about the development in the UK,” Soren Thorup Sorensen, Kirkbi’s CEO, said by phone. “But there are areas in London that aren’t linked to the financial sector.”

The Lego fund’s latest purchase is in an area dominated by technology, media and telecom companies, which Sorensen is betting will probably be less exposed to the exodus that may hit the London banking community once Brexit takes effect. Sorensen also said Kirkbi is big enough to sit out the short-term jolts stemming from the uncertainty surrounding the UK’s depature.

“We very much hope we will do more in 2018,” Sorensen said. “We will look at Germany, Switzerland and the UK.”