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UK house prices down 1.1% in 2012

Average UK house prices rose 0.5 per cent during the final quarter of 2012 to reach £162,262, but finished the year 1.1 per cent down on an annual basis.

Eleven out of 13 regions in the UK saw annual price falls over the course of the year, according to Nationwide’s house price index for December. Only London and the South West avoided annual declines as average prices rose 0.7 per cent and 0.2 per cent respectively.

England was the strongest performer out of the home nations, although average prices still fell 0.4 per cent during 2012 to £186,390 and the divide between the North and the South of the country widened even further.

Nationwide chief economist Robert Gardner says: “Within England, the North/South divide in property prices continued to widen, with the price of a typical home in the South now around £95,000 more than in the North, a new high and around 2 per cent more than at the close of 2011”.

London was the best performing region for the second year running. The average cost of a house in the capital now stands at £300,361 after a 0.7 per cent rise over the course of the year. Nationwide says prices in London are now just 1 per cent below their 2007 peak.

Yorkshire and Humberside was the worst performing region, experiencing a 2.5 per cent fall in prices over the course of 2012.

Figures released by the Land Registry yesterday portray 2012 as a more positive year for the housing market, suggesting average prices actually rose 0.9 per cent on an annual basis.

Legal and General Mortgage Club managing director Ben Thompson says: “Whilst house prices averaged 1 per cent lower in 2012, effectively negating the 1 per cent rise we saw at the end of 2011, there is hope that over the next 12 months, the outlook will improve.

“Although we can predict the housing market will remain broadly flat in 2013, the mortgage market does look set to benefit in the first half of the year from fierce price competition on lower LTV products. The number of remortgages we see approved is also likely to increase in 2013.”

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