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U.K. housing prices spike
In a bit of good news/bad news, housing prices in the United Kingdom increased by 3.9 percent in May, the largest monthly jump in more than 11 years, according to data from Halifax, the United Kingdom’s biggest mortgage lender. The jump in prices, the highest month-on-month rise since October 2002, is reflective of a strengthening economic recovery and improving consumer sentiment. On the downside, the trend of increasing residential property values has raised concerns about affordability, inflation and the loosening of mortgage lending standards.
The average U.K. property value climbed to £184,464 ($308,721), from £177,648 ($297,313) at the end of April. The escalation in prices has been fueled by low interest rates and strong demand. The latest Halifax figures also show that prices jumped 8.7 percent compared with the same period a year ago.
The increase in housing costs has policymakers and the Bank of England concerned and could lead to t