HomeBusinessBUSINESS LIVE: House prices accelerate; Virgin Money boosts outlook

BUSINESS LIVE: House prices accelerate; Virgin Money boosts outlook


BUSINESS LIVE: House price growth strongest since 2005; Virgin Money boosts outlook; Sterling momentum on rake hike bets


British house prices jumped by 0.8 per cent in January, marking the strongest start to any year since 2005, Nationwide figures reveal.

The rise beats economist forecasts of 0.6 per cent growth and follows a 1.1 per cent uptick in December, with house prices now 11.2 per cent higher than their level in January 2021.

Challenger bank Virgin Money UK has boosted expectations for its annual net interest margin outlook – a key measure of a bank’s underlying profitability – as it benefits from higher-yielding lending on the back of rising interest rates.

The London-listed firm said its net interest margin will be about 175 basis points in fiscal 2022, following a strong first quarter in which in benefitted from lower cost funds, higher hedge contributions and higher yielding lending mix.

Sterling has hit its highest level against the euro for nearly two years, with investors betting that interest rates will rise again this week.

The pound rose as high as €1.2038 against the single currency – a level last seen in February 2020 before the pandemic struck – with the Bank of England’s Thursday meeting expected to see rates rise from 0.25 per cent to 0.5 per cent.

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Robert Garnder, Nationwide chief economist: ‘Reduced affordability is likely to exert a dampening impact on market activity and house price growth’

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