LONDON | This is what happens when the size of your construction sector remains under the 10 percent per GDP level, and the cost of credit for the State and the country’s banking sector is mild enough as to allow a slow deleverage process. The Nationwide house price index reported Thursday that UK house prices edge up by 0.3% in May.
Over the last eighteen months, house prices have been remarkably stable despite technical recession showing up in the British economy. Robert Gardner, Nationwide’s chief Economist, said that
“May’s data provides some comfort that this pattern is being maintained. Prices were modestly up in May, and were just 0.7% lower than May last year.
“Demand for homes remains subdued on the back of weak labour market conditions, but the lack of homes coming onto the market is providing support for prices. This is in part a reflection of the low rate of building in recent years which has failed to keep pace with household formation.”
If only there had been the same success in taming down other excesses…