The Inside Edge
House price figures for 2011 are currently being announced throughout the media and the Nationwide Building Society is one of the first to comment on the statistics and to offer their predictions for 2012. Over the course of the last twelve months, the average house price rose by 1% but a fall of 0.2% from November to December leaves Nationwide predicting a subdued market this year.
Regionally, there were some significant differences with prices in London rising sharply while in Northern Ireland there was a contrasting slump. Nationwide’s chief economist Robert Gardner claimed that the figures pointed to a resilient market in the face of such economic uncertainty.
“The 1% rise in house prices recorded over the past 12 months could hardly be described as a strong performance, but against a backdrop of anaemic economic growth and a deteriorating labour market, UK house prices were surprisingly resilient in 2011,” Gardner said.
That has led the society to predict a similar scenario for 2012 as experts point to a stifling of economic growth as the Eurozone crisis continues to dominate the headlines. Against this backdrop, Nationwide feel that the market can do nothing but stagnate.
The society’s figures for 2011 also serve to highlight just how extreme some of the regional variations have been over the last twelve months. In Northern Ireland, that drop in prices equated to 8.7% while in London, the average price rose by 5.5%.
Earlier this week, the Daily Telegraph hinted at a rise in ‘forced sales’ over the next twelve months but Gardner went on to suggest that this type of property purchase had little or no effect on the market last year.
“Thanks to continued low interest rates, the number of forced sales remained low,” Gardner added. “Together with a dearth in building activity in recent years, this prevented a glut of unsold homes from accumulating on the market. This meant that although demand and supply were both weak, they remained relatively well-matched.”
This is the time of year when market predictions will dominate the property news but as far as Nationwide as concerned, they can see little change ahead for 2012 with sideways figures or a slight drop being the most likely outcome,
“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,” Robert Gardner concluded.