House prices dip in December ahead of a stagnant 2012
Friday, 30 December 2011 10:17
Despite the ailing British economy and problems in the eurozone, house prices in the UK rose over the course of 2011.
This is the discovery of new research by Nationwide, which found that although the cost of property declined by 0.2 per cent in December, it went up by one per cent when looking at the full 12 months.
An average home now has an asking price of £163,822.
London was the only area that remained buoyant, with house prices there going up by 5.5 per cent this year
Nationwide's chief economist Robert Gardner said these figures show the housing market has proven "surprisingly resilient", even though its performance cannot be described as strong.
He pointed out that mortgage approvals remained low, while weak supply and demand kept prices from moving strongly in either direction.
Mr Gardner warned that the continuing eurozone crisis and its effects on international trade, as well as poor labour market conditions at home, mean next year may not be much better.
"As things stand, 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," he concluded.
Matt Hutchinson from Spareroom.co.uk also predicted little change for 2012, with possible higher mortgage rates and rising living costs meaning "it may only be cash rich buyers who can take advantage of a housing market on its knees".
Meanwhile, IHS Global Insight's Howard Archer said he believes the Nationwide research "reinforces our view that prices are poised to fall by around five per cent in 2012".
He pointed out that if the crisis in Europe worsens, it may lead the UK economy to contract further, pushing up unemployment and weighing down further on property prices.
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