British house prices remain flat
British house prices were flat month-on-month in November and they are likely to stay that way or edge slightly lower over the next year, mortgage lender Nationwide said today.
The average UK house price stands at £163,853, showing a 1.2 per cent decline on a year ago and prices have been dropping on an annual basis for nine months in a row, Nationwide said.
The 0 per cent month-on-month change in November follows a small 0.6 per cent monthly increase recorded by the study in October.
Robert Gardner, Nationwide’s chief economist, said the performance of the housing market is strongly linked to the employment situation, and wage growth is likely to remain under downward pressure as competition for jobs remains strong in the coming months.
He said: “This supports our view that house prices are likely to remain broadly flat or decline modestly over the next 12 months.”
However, Nationwide said that overall, house prices have remained stable, which has been helped by the better-than-expected performance of the labour market in the tough economy.
Mr Gardner said: “The predominant theme remains one of stability. Indeed, UK house prices were unchanged over the month in November, after taking account of normal seasonal factors.”
Mr Gardner said that annual price growth has remained within a narrow margin of between 1.5 per cent and minus 1.5 per cent on all but two occasions over the last two years.
The report follows the Land Registry’s house price figures for the month of October released yesterday, which showed the patchy state of the housing market across the country.
The Land Registry report showed that prices grew by 7 per cent year-on-year in London but dropped by almost 6 per cent in the North East.
An £80 billion Government scheme to kick-start lending was launched in August, which has seen the number of mortgages on the market increase by nearly a fifth, although many of the biggest increases in choice and the best deals have been aimed at home buyers with big deposits.
In a sign that housing market activity has picked up recently, Bank of England and British Bankers’ Association (BBA) figures have both shown recent rises in the number of mortgage approvals for house purchase.