LONDON — Home prices in the United Kingdom jumped 2.6 per cent last month, according to leading mortgage lender Halifax, which also warned that the pace may not be sustained as weaker economic confidence and uncertainty surrounding Britain’s European Union (EU) referendum weigh on the market in the coming months.

The average value of a home surged to £214,811 (S$409,025), said Halifax yesterday, up 11 per cent from March a year earlier. In the first quarter, values increased 2.9 per cent from the previous three months, it said.

While a shortage of homes on the market and record-low borrowing costs have boosted demand for housing in the past couple of years, Britain’s economy has shown signs of slowing in recent months and the June 23 referendum on EU membership is clouding the outlook. Values in March may also have been boosted as investors rushed to beat a tax increase on second properties, which came into force this month.

“(There is an) acute supply/demand imbalance continuing, despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust,” said Mr Martin Ellis, an economist at Halifax.

“(However) worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market.” BLOOMBERG