LONDON (MNI) – UK house prices dipped in December, ending 2011 up
1.0% on a year earlier, and the housing market looks set for another
year of weak activity in 2012, according to the Nationwide.
The last Nationwide survey of 2011 found house prices down 0.2% on
the month in December and up 1.0% on the year, with Q4 house prices up
0.3% on the quarter. The Nationwide report follows the December
Rightmove survey, which showed house asking prices fell 2.7% on the
month, and both raise the spectre of house price deflation in 2012.
“The housing market in 2012 looks likely to be characterised by low
levels of activity once again, with prices moving sideways or modestly
lower over the course of the year,” Robert Gardner, Nationwide’s Chief
Economist, said.
Nationwide’s data showed the London housing market performing more
robustly than in the regions. London house prices were up 5.5% in 2011
compared with the 1.0% rise seen in the nation as a whole.
The worst performing region in 2011 was Northern Ireland, with
prices falling 8.7%.
UK houses have become more affordable, with the price-to-earnings
ratio in the Nationwide series falling to 5.2 from its 6.4 peak back in
2007, before the credit crunch kicked in.
Bank of England data have shown mortgage approvals running at
little more than half their long run average, and demand is likely to
stay subdued next year.
“With the UK economy struggling to gain momentum, labour market
conditions are likely to remain challenging in 2012, deterring buyers
from entering the housing market,” Gardner said.
–London newsroom: 4420 7862 7491; email: drobinson@marketnews.com
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