The UK lender’s latest figures show that the price of a typical home fell by 0.1% last month and that overall in 2012 price are down by 1%, reversing the 1% increase recorded in 2011.
The typical UK home is now worth £162,262 but there are regional variations and the North/South divide in property prices continues to widen.
‘UK house prices were little changed in December, declining by just 0.1% over the month, though this was sufficient to keep the annual rate of price growth in negative territory for the tenth month in succession,’ said Robert Gardner, Nationwide’s chief economist.
‘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,’ he explained.
‘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,’ he added.
Overall most regions saw price falls during 2012 with 11 out of 13 UK regions recording annual price falls. England continued to outperform the other home nations, with prices down 0.4% in annual terms. The typical property in Wales recorded a 2.7% fall, while Scotland saw prices dip by 3.3%.
London was the best performing region and Northern Ireland continued to see the largest price falls. For the fifth year in succession Northern Ireland registered the largest decline in property values, with prices falling by 8.2%, leaving prices more than 50% below their 2007 highs. This is a significantly larger correction than the national average, where overall UK house prices are around 11% below their peak.
‘Within England, the North/South divide in property prices continued to widen, with the price of a typical home in the South now around £95,000 more than in the North, a new high and around 2% more than at the close of 2011,’ said Gardner.
‘The uncertain outlook for the wider economy is also likely to have kept many potential buyers on the sidelines, unwilling to make such a major financial commitment until they feel more optimistic about the future. Indeed, despite the rise in employment over the past twelve months, consumer confidence has remained well below normal levels,’ he added.