29 Sep Nationwide says UK house prices ‘treading water’
New figures today show that UK prices increased by an average of 0.1% in September, but down by just 0.3% over the past 12 months, a trend expected to continue into 2012. but are still 0.3% lower than a year ago. Its latest figures show that prices rose 0.1% during September, while the three-month-on-three-month figures, which are generally considered a better indication of trends, have remained static. The average house price in September was £166,256, compared to £165,914 in August.
In the third quarter of 2011 prices fell in eight out of 13 regions compared with the same three months last year, Nationwide said.
London, unsurprisingly, boasted the strongest annual growth, with prices up 0.5%. Northern Ireland on the other hand remained the weakest region, with prices falling 9.3% over the year. On a quarterly basis, however, prices in London fell 1.9%. Prices were also down 0.5% in Scotland, 0.2% in Wales and 4.1% in Northern Ireland.
‘Sluggish demand for homes on the back of weak labour market conditions, combined with only a gradual rise in the supply of available properties, has helped to keep property prices fairly stable since the summer of 2010,’ said Robert Gardner, Nationwide’s chief economist. ‘Providing the UK recovery gradually gathers momentum in the months ahead, we continue to expect house prices to move sideways or to drift modestly lower over the remainder of 2011 and into 2012’.
‘Nevertheless, with demand and supply in the housing market finely balanced, recent financial market gyrations and the more challenging global economic backdrop have increased the downside risks in the period ahead.’
Nicholas Ayre, director of property-buying website Home Fusion, said: ‘To say the Nationwide House Price Index is yo-yoing up and down would be to suggest a sense of energy that frankly isn’t there’.
‘But given the truly dire economic backdrop, both domestic and global, it’s a surprise that house prices overall are proving so resilient. Things could potentially be a lot worse than they are,’ Ayre said. ‘If unemployment continues to rise, then we could see more properties come onto the market as people are forced to sell. This could provide further downward pressure on prices.’
Howard Archer from IHS Global Insight said: “The current financial market turmoil and heightened concerns over the domestic and global economies are unlikely to do much for consumer confidence and willingness to commit to buying a house, in the near term at least.
“These factors are expected to outweigh the support to the housing market coming from extended very low interest rates, so we forecast house prices to fall by about 5% from current levels by mid-2012.”
In contrast, figures from Rightmove earlier this month show house prices increased 0.7% in September – though the property website said prices have fallen 3% since the start of summer. Figures from the Land Registry released yesterday revealed that prices are down 2.6% on last year.