North-south property gap widens
THE north-south property price divide continued to widen last month with the annual average cost of a home being down 1.1 per cent nationally.
Nationwide figures suggest house prices remained almost unchanged in December, continuing the trend throughout 2012 and declining by 0.1 per cent on average, reversing the one per cent price gain recorded in the previous year.
The average cost of a home last year was £162,262, with the most expensive property being in the south (London) and the cheapest property selling in the north (Northern Ireland).
Robert Gardner, Nationwide's chief economist, said: "Given that the UK economy was in recession for much of 2012, a one per cent decline in house prices may be seen as a relatively resilient performance.
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"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 said the future for property prices hangs in the balance with prices most likely remaining "flat".
"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."