U.K. House Prices Jump 1.7% as Shortage of property put pressure on values

U.K. house prices surged the most in five months in June as a shortage of property for sale continued to put upward pressure on values.

The average cost of a home rose 1.7 percent from May to an average 200,280 pounds ($308,500), mortgage lender Halifax said on Wednesday. From a year earlier, prices jumped 9.4 percent.

“Supply remains very tight,” said Martin Ellis, an economist at Halifax. “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015.”

On a less volatile quarterly basis, prices rose 3.3 percent in the three months through June, up from 2.7 percent in the first quarter. Ellis said rising employment and real-wage growth, coupled with low borrowing costs are also fueling the market and there has been a “recent modest pick-up in demand.”

Nationwide Building Society said last week that annual house-price growth cooled to 3.3 percent in June, the least in two years, from 4.6 percent. It said there has been a “gradual downward trend” since mid-2014.

Nevertheless, Bank of England Governor Mark Carney isn’t taking chances. Citing momentum in the market, he said this month the central bank is maintaining measures aimed at restricting riskier mortgage borrowing.