The UK house prices fell 0.1% in December, ending 2012 down by 1% as compared with the previous year, and recovery seems to be unlikely given the current economic situation, while house prices in London marginally rose by 0.7% in 2012, with the average London home costing £365,000. Nationwide expects the house prices to stay put at the current level or drop modestly in 2013.
The report stated that the north-south divide has widened in 2012, as the price of a home is typically around £95,000 more in the South than in the North, representing a 2% increase over 2011 house prices. The Nationwide report also reveals that London and South West to be the only regions to record a price rise, while all other areas witnessed price falls. London recorded a 0.7% increase in house prices, while South West house prices rose 0.2%.
House prices in England dropped 0.4% in 2012 to £186,390, with Yorkshire and Humberside emerging as the weakest housing property markets where prices fell by 2.5%. Wales house prices fell 2.7% to reach £131,630, while house prices in Scotland also plummeted by 3.3% to £131,795. Northern Ireland house prices fell drastically by 8.2% to £104,282, which was 50% lower than the 2007 highs.
The report also points out that properties continue to remain expensive with house prices still 5.1 times earnings, above the long term average of 4.2. Robert Gardner, Nationwide’s chief economist, said, “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.”
Divergent house price studies for 2013 have evolved since the last month with the Hometrack predicting prices to edge down by 1% in 2013, while Halifax predicts that house prices in 2013 are likely to remain flat. Rightmove feels that inadequate supply of homes in the market will boost asking prices by around 2% in 2013.