Member Article

UK house prices dip 1% in 2012

House prices fell in the UK by 1.1% in the last 12 months, with 11 out of 13 regions showing annual price drops despite rises in employment.

An index brought out by building society, Nationwide, showed the average house price in the UK is currently £162,924.

The most expensive region to live in, unsurprisingly, is London, which also sported the strongest annual price change, while Northern Ireland is the least expensive place to buy a house.

Northern Ireland also held the weakest annual price change in the UK. Nationwide indicated that a divide between the Northern and Southern regions of the UK was evident in its findings, with the average house price in Northern Ireland standing at £104,282, and the average London house price coming in at £300,361.

Of the regional towns and cities, Bradford fared the worst with a 9% fall in average house prices, while Manchester, Belfast, Liverpool and Plymouth followed closely behind. Conversely, Cambridge prices rose by 6%, while Coventry and St. Albans were up 3% and Brighton and Norwich house prices were up 2%.

In December, typical house prices fell by 0.1%, and Nationwide said this was sufficient to maintain a negative annual rate of price growth for the tenth consecutive month.

Nationwide’s chief economist, Robert Gardner, commented: “Given that the UK economy was in recession for much of 2012 a 1% decline in house prices may be seen as a relatively 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, remained subdued, well below their long run averages.

“The outlook remains uncertain. 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.”

This was posted in Bdaily's Members' News section by Miranda Dobson .