3rd January 2013
This means that a typical home is worth £162,262. The survey also found that the North South house price divide continued to widen. The monthly price fell 0.1 per cent in December with prices falling slightly for the tenth month in a row.
Nationwide’s chief economist Robert Gardner says: “Given that the UK economy was in recession for much of 2012 a one per decline in house prices may be seen as a resilient performance. However the fact that prices declined even though employment rose strongly suggests that conditions remain fragile especially since other signs of housing market activity such as the number of mortgage approvals remain subdued, well below their long term averages.
“Continued low interest rates and policy measures such as the Funding for Lending Scheme should provide some support. But, with the economic recovery expected to remain fairly weak, the housing market is likely to be characterised by low levels of activity again in 2013, with prices remaining flat or modestly lower over the course of the year.”
The lender also says that the high levels of employment remain a bit of a puzzle given flat economic growth. Higher employment usually supports prices but as Nationwide points out average wages are now at 2004 levels.
The building society says that while demand remains weak so has the supply of properties. Low interests have dampened the number of forced sales and this coupled with a dearth of building activity means there has been no glut of unsold homes.
Gardner says that while demand remained weak, supply and demand were evenly matched.
The nations of the UK saw widely divergent fortunes in terms of house prices. In England prices fell just 0.4 per cent on average, Wales saw a fall of 2.7 per cent, Scotland saw a dip of 3.3 per cent but Northern Ireland saw a painful fall of 8.2 per cent. The Northern Irish correction has been huge since 2007 falling 50 per cent compared with the UK average of 11 per cent since the financial and economic crisis struck.
The price gap between houses in the North and South widened with the price of a typical home in the South now around £95,000 more than in the North – a new high and around 2 per cent more than the end of last year. London and the South West were the two regions of the United Kingdom which saw price rises in the last twelve months with falls everywhere else as shown by the table below.
Regional prices and percentage change over the last 12 months
London £300,361 0.7%
South West £184,625 0.2%
Outer South East £198,009 -0.2%
Outer Metropolitan £246,453 -0.2%
West Midlands £144,972 -0.8%
East Midlands £138,486 -0.8%
North £114,264 -1.3%
North West £133,253 -1.6%
East Anglia £164,701 -1.9%
Yorks & Humberside £131,046 -2.5%
Wales £131,630 -2.7%
Scotland £131,795 -3.3%