Most regions in the UK saw property prices fall in third quarter of 2012
Most regions in the UK saw annual property price falls in third quarter of 2012 but London has performed the best with values just 2% below peak.
The latest quarterly report from lender the Nationwide shows that average house prices fell by 0.5% and prices are down 1.6% compared with the same quarter in 2011.
England outperformed other regions by a significant margin with prices down 0.3% in annual terms. While Northern Ireland continues to see the largest price falls with prices now down 53% compared with peak levels in 2007.
Wales is also towards the bottom end of the distribution, with prices currently 16% below their all time highs. North Wales was the worst performing area with a 9% annual price fall.
Within England, the southern regions have generally seen prices hold up better, in particular London and the outer metropolitan area. In London prices are up 2.1% year on year.
In London Wandsworth saw the strongest growth, with prices up 8% year on year, whilst Hounslow saw the weakest growth, with a 3% year on year fall. Westminster remains the most expensive borough, with average prices around £730,000, nearly four times higher than those in Barking and Dagenham, the cheapest borough.
Scotland saw a 1.6% seasonally adjusted fall in the third quarter, resulting in the annual rate of change deteriorating from -2.3% to -4%. Edinburgh regained its position as Scotland’s most expensive city, although Aberdeen remains close behind.
Meanwhile southern Scotland, which includes Ayrshire and the Borders, saw a 10% year on year fall, to become the least expensive area of Scotland.
The data also shows that average house prices in the south are currently around £96,000 higher than those in the north. Since 2005, average northern England prices have slipped from 70% to 59% of average southern England prices.
On a monthly basis the price of a typical UK house fell by 0.4% in September and prices are now 1.4% lower than one year ago at £163,964.
The fall comes after a 1.1% rise in August and the lender said that monthly price changes have been impacted by a number of one off factors this year, such as the ending of the stamp duty holiday that cannot be controlled by the usual process of seasonal adjustment.
‘For this reason the annual rate of house price change is a better guide to the state of the market at present. On that basis, the housing market remains fairly stable, with prices 1.4% lower than September 2011,’ said Robert Gardner, Nationwide’s chief economist.
The lender is fairly upbeat about the outlook for the residential property market.
‘Looking forward, policy measures such as the Bank of England’s Funding for Lending Scheme should provide support for activity in the housing market by ensuring the availability of credit and lowering its cost,’ explained Gardner.
‘There are encouraging signs that the UK will soon return to modest growth. The Olympics are likely to have delivered a boost that will almost certainly bring the recession to an end in the third quarter and business surveys point to a gradual expansion in business activity ahead,’ he pointed out.
‘Moreover, signs that European policymakers are prepared to take more aggressive measures to deal with the crisis in the single currency area is also good news for UK prospects. After all, the UK remains heavily reliant on international trade to drive its recovery at present, and the Eurozone is our largest trade partner,’ he said.
‘Overall, we expect the UK economy to see a gradual recovery over the next twelve months, with house prices remaining relatively flat or declining only modestly over the same period,’ he added.