Despite the rest of the economy being in some trouble, the housing market still increased in value last year by around one percent. This is according to the latest figures released by the building society Nationwide. December saw a drop in house prices of a fifth of percent but despite this fall at the end of year the average house price has risen to just over £165,000.
This is not the only study that are shown changes in prices in the housing market. According to the Land Registry the average price of a house in England and Wales is just over £160,000. The chief economist for Nationwide is Robert Gardner who commented, “A one percent growth in the housing market is not exactly a great performance but when you compare it to the performance of the rest of the economy it is certainly quite impressive.”
London is an area that has outperformed the rest of the country with house prices increasing by over five percent in the last year. This is in stark contrast to house prices in Northern Ireland which fell by around nine percent. The only areas with falling house prices in England were in the north in the north-west where the cost of houses dropped by around one percent.
Mr Gardner continued, “In the last three years London has outperformed the rest of the market. Despite the rest of the economy, the prices in London are still just 1.5 percent below the record price of the region. What is clear from these figures is that there is a significant divide in house prices between the South and the North.”
The average house price in London is significantly above the average for the UK with the value of the average property being just shy of £343,000. In the south-east house prices are also very high but there was a drop in prices last year with a fall of around one percent. When you compare this with the falling value of property in the North there is a significant difference as prices in the north-east dropped by nearly 6 percent.
One of the most significant changes in the whole of the United Kingdom was in Hartlepool were the price of property fell by a staggering 20 percent bringing the average price of a home to just over £75,000. LSL Property Services is headed by David Newnes who commented, “Mortgage lending has remained restricted which makes it a tough year for property, however in the second half of the year we did see some improvements.
Lenders have dropped their mortgage rates because of the ultra low interest rates set by the Bank of England which makes lending conditions quite favourable. Many people are held back by the significant deposit amount but if you can scrape this together then you are going to be able to get a mortgage at a very affordable price.” Over the next year most analysts in the housing market are predicting very little change in prices.