UK property prices remain flat

by Ray Clancy on March 5, 2013

UK sees new stamp duty rates come into effect

UK property prices remain flat

The price of a typical home in the UK rose by 0.2% in February to £162,638, but was unchanged compared with a year ago, February 2012, the latest house price index from the Nationwide shows.

It means that according to the index, annual house prices have been flat for two months in a row and Nationwide chief economist Robert Gardner said that while the market is stable and there are reasons for optimism any improvement is likely to be slow because of challenging economic conditions.

‘While activity in the housing market remains subdued by historic standards, there have been tentative signs of a pick-up in recent months. The Funding for Lending Scheme has achieved some success in bringing down mortgage rates, with encouraging signs of an improvement in credit availability,’ he explained.

‘While the economic backdrop remains challenging, there are reasons for cautious optimism that activity will gather momentum in the months ahead. In particular, employment is rising at the fastest pace since the late 1990s which, if maintained, should help support demand for homes,’ he pointed out. ‘However, progress is likely to be gradual, as stubbornly high inflation will continue to exert pressure on household budgets. Moreover, buyer confidence is likely to remain fragile until there are signs that the wider economic recovery is firmly entrenched,’ he added.

Quote from PropertyCommunity.com : “UK home owners believe that the value of their property declined over the last month, for the 31st consecutive month, albeit at the joint slowest rate since July 2010, new research shows.”

However, figures from the Land Registry covering England and Wales give a more positive outlook, showing that residential property prices increased by 1% in January taking the average house price to £162,441. The annual prices increase is also 1% and London saw the highest price increases in the last 12 months at 7.1% – London also experienced the greatest monthly rise with an increase of 2.5%.

The North West of England experienced the greatest annual price fall with a decrease of 4.2% and the most significant monthly price fall with a decrease of 1.9%. The most up to date figures available show that during November 2012, the number of completed house sales in England and Wales increased by 1% to 61,091 compared with 60,369 in November 2011.

The latest data from Hometrack also suggests that London and the South East of England are driving the UK residential market forward. Its report shows that 75% of markets registering price rises in February where in these regions while across the country 14.8% of postcodes registered price rises. The data also shows that while 8% of postcodes saw prices fall, headline prices grew by 0.1% which is the first time that values have increased since May 2012.

The firm says that the statistics are evidence of a seasonal upturn in sales agreed, demand and an increase in the supply of homes for sale.

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