UK housing glut pushes prices down

LONDON - A British housing-market gauge fell more than economists expected last month to the lowest since May 2009 as an increase in supply of homes for sale pushed down prices, the Royal Institution of Chartered Surveyors said.

The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 32 percentage points, down from minus 8 points in July, the London-based group said. The median forecast in a survey of 17 economists was minus 12 points.

The housing recovery may be faltering as the prospect of the biggest spending squeeze since World War II deters buyers and banks restrict access to credit.

Bank of England data show a pickup in mortgage lending has stalled even as policy makers hold the key interest rate at a record low.

The price balance in all 12 regions tracked showed declines in the past three months, led by a reading of minus 59 in East Anglia. The gauge for London was minus 12.

Banks approved 48,772 mortgages in July, little changed from June and less than half the level at the start of 2007. A report from Nationwide showed an index of consumer confidence rose five points last month, although is down from a year earlier.

The central bank held the key interest rate at 0.5 per cent last week.

Chancellor of the Exchequer George Osborne will announce the Government's spending plans on October 20.

- BLOOMBERG