UK house prices little changed in December

UK house prices were little changed in December, declining by just 0.1% over the month, though this was sufficient to keep the annual rate of price growth in negative territory for the tenth month in succession, according to the Nationwide House Price Index.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “Over 2012 as a whole, the price of a typical UK home remained fairly stable, declining by 1%, reversing the 1% price gain recorded in 2011."

"Given that the UK economy was in recession for much of 2012 a 1% decline in house prices may be seen as a relatively resilient performance. 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.

"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.

"Average UK house prices rose by 0.5% in the final quarter of 2012, after allowing for seasonal effects.  Prices were down 1.1% over the year as a whole.

"England continued to outperform the other home nations, with prices down 0.4% in annual terms."