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| UK house prices fell 1% in 2012, Nationwide says | UK house prices fell 1% in 2012, Nationwide says |
| (35 minutes later) | |
| UK house prices fell by 1% on average last year, the Nationwide says, and it predicts a similar outlook for 2013. | UK house prices fell by 1% on average last year, the Nationwide says, and it predicts a similar outlook for 2013. |
| The building society said that the average property was valued at £162,262 at the end of 2012, following a 0.1% drop in December. | The building society said that the average property was valued at £162,262 at the end of 2012, following a 0.1% drop in December. |
| Separately, a survey of lenders for the Bank of England found that its Funding for Lending Scheme (FLS) had increased the general supply of mortgage funds. | |
| Lenders told the Bank they expected this trend to continue in 2013. | |
| London bubble | |
| The Nationwide reported that buyers were still nervous about the economy, and a lack of mortgage availability meant there was relatively little housing market activity during 2012. | |
| The 1% drop reversed a 1% average price increase in 2011, the Nationwide said. | The 1% drop reversed a 1% average price increase in 2011, the Nationwide said. |
| However, the average price masked significant differences in property price changes in the different nations and regions of the UK. | However, the average price masked significant differences in property price changes in the different nations and regions of the UK. |
| For example, prices were 0.7% higher in London at the end of 2012 compared with a year earlier but dropped 8.2% over the same period in Northern Ireland. | For example, prices were 0.7% higher in London at the end of 2012 compared with a year earlier but dropped 8.2% over the same period in Northern Ireland. |
| The figures are based on the Nationwide's own mortgage data, and show less of a bubble in the capital than Land Registry figures released on Wednesday which indicated house prices in London had risen by 7% in the year to the end of October. | The figures are based on the Nationwide's own mortgage data, and show less of a bubble in the capital than Land Registry figures released on Wednesday which indicated house prices in London had risen by 7% in the year to the end of October. |
| Choosy lenders | |
| The Bank of England's Credit Conditions Survey said that the Funding for Lending Scheme was having an impact. | |
| "In the three months to mid-December, lenders reported a significant increase in the amount of credit made available to the secured household and corporate sectors, and a slight increase in the availability of unsecured credit to households," it said. | |
| "The Funding for Lending Scheme was widely cited as contributing towards the increase in secured and corporate credit availability. | |
| "Lenders expected a further increase in the availability of credit to all sectors over the coming quarter," the Bank added. | |
| However, lenders said they would still continue to be very fussy about which customers they would chose to lend money. | |
| "Some lenders expected to tighten credit scoring criteria slightly, reflecting their desire to ensure that any increase in lending would adhere to [their] risk appetite," the Bank said. | |
| Outlook | Outlook |
| The Nationwide said that conditions in the housing market remained "fragile", despite positive jobs news, with wages growing more slowly than the cost of living. | The Nationwide said that conditions in the housing market remained "fragile", despite positive jobs news, with wages growing more slowly than the cost of living. |
| "The uncertain outlook for the wider economy is also likely to have kept many potential buyers on the sidelines, unwilling to make a major financial commitment until they feel more optimistic about the future," said Robert Gardner, the Nationwide's chief economist. | "The uncertain outlook for the wider economy is also likely to have kept many potential buyers on the sidelines, unwilling to make a major financial commitment until they feel more optimistic about the future," said Robert Gardner, the Nationwide's chief economist. |
| He said the reason that prices had remained "relatively resilient" in the circumstances, and had not dropped further, was that low interest rates had meant mortgages had remained affordable for many people. | He said the reason that prices had remained "relatively resilient" in the circumstances, and had not dropped further, was that low interest rates had meant mortgages had remained affordable for many people. |
| This meant that people under financial pressure had not been forced to sell up, which would have increased supply and led to prices falling. | This meant that people under financial pressure had not been forced to sell up, which would have increased supply and led to prices falling. |
| Mr Gardner predicted that activity would remain low in 2013, and prices would remain the same or dropping slightly throughout the year. | Mr Gardner predicted that activity would remain low in 2013, and prices would remain the same or dropping slightly throughout the year. |
| There have been slightly more optimistic forecasts from the Council of Mortgage Lenders (CML) and the Royal Institution of Chartered Surveyors (Rics), who have both predicted a modest rise in sales for 2013. | There have been slightly more optimistic forecasts from the Council of Mortgage Lenders (CML) and the Royal Institution of Chartered Surveyors (Rics), who have both predicted a modest rise in sales for 2013. |
| Completed sales were 6% higher during 2012 than they were the year before, according to figures from HM Revenue & Customs. | Completed sales were 6% higher during 2012 than they were the year before, according to figures from HM Revenue & Customs. |
| Have you recently bought a house? Are you a first time buyer? Or are you finding it difficult to get on the property ladder? Send us your comments using the form below. | Have you recently bought a house? Are you a first time buyer? Or are you finding it difficult to get on the property ladder? Send us your comments using the form below. |