West's house prices stabilise but North-South gap widens

House prices in the South West dropped fractionally during last year then went completely flat, according to the latest figures relied on by industry experts.

Data from the Land Registry showed a drop in prices across the region of 0.4% between November 2011 and 2012, leaving the average property costing £170,762.

Monthly analysis from October to November last year showed no change at all, suggesting the market may now have bottomed out.

Across the country, the regional picture was broadly repeated, with small rises and falls – except for the East, South East and London, where property prices rose by 5.9%.

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There was also evidence of a widening North-South divide, with the price of a typical home in the South now standing at a high of about £95,000 more than in the North – a 2% yearly increase.

Richard Copus, South West spokesman for the National Association of Estate Agents, said the figures were "spot on" for Devon and Cornwall and he predicted nothing more dramatic than a 0.5% rise this year.

"People have accepted that we are in a stable market – nobody expects prices to go up but also they no longer think they will go down," he added.

"There is more confidence and banks are beginning to lend a little bit – this year is likely to see much of the same with slow and steady rises in 2014.

"The only caveat is what happens in the national and international economy – we have never been here in the past century and it is a new world for everybody."

The Land Registry, which records every sale in England and Wales, released its market trend data this week, based on 63,700 sales during November.

It recorded a 0.9% rise during the year to November and a 0.3% monthly increase, leaving the average house costing £161,490.

A separate report by building society and mortgage lender Nationwide, including data for December, showed a UK monthly house price fall of 0.1% from November.

The building society's study arrived at an average sale figure of £162,262, a drop of 1% over 2012, reversing a 1% increase recorded in 2011.

It forecast that prices were likely to remain flat or edge lower still during 2013.

The data showed 11 out of 13 UK regions saw annual prices fall during 2012, topped by London where prices rose 0.7% at the end of 2012 compared with a year earlier.

The South West was the only other region to record a yearly rise, at 0.2%.

Recent lending figures have shown a pick-up in mortgage approvals and the Council of Mortgage Lenders has said it expects the housing market to "feel more stable and positive" in 2013.

Robert Gardner, Nationwide's chief economist, said: "With economic recovery expected to remain fairly weak, the housing market is likely to be characterised by low levels of activity again this year."