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Outlook for house prices remains 'highly uncertain'
House prices fell 0.6% in June, and the gap between prices in the North and South continued to widen, according to new figures.
UK house prices fell 0.6% in June, according to Nationwide.
This means prices are down 1.5% on an annual basis – the lowest reading since August 2009.
Nationwide’s quarterly report shows that prices are some 1.1% lower than in the same three-month period last year.
In fact, in the three months from April to June, eight out of 13 UK regions saw prices drop compared with a year ago. Scotland reported the biggest quarterly decline, with prices down 2%, while London boasted the strongest growth rate at 1%.
The gap between house prices in the north and south of England also continued to widen in the second quarter, said Nationwide, with house prices in southern England exceeding those in the north for the 30th consecutive quarter. Average house prices in the south are now around £96,000 higher than those in the north – a record high.
The slightly weaker trend seen since March, however, is ‘unsurprising’ given the economic backdrop, said Nationwide’s chief economist, Robert Gardner. And looking forward, with economic conditions expected to remain challenging over the next 12 months, the outlook for house prices is 'highly uncertain'.
‘However, policymakers’ efforts to bolster the supply of credit to the economy and to help lower the cost should provide support to demand,’ Gardner said. ‘Moreover, the supply side of the market is still constrained, with construction failing to keep pace with the number of new households being formed.’
'Overall, this suggests a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months,' he added.
The expiry of the stamp duty holiday for first-time buyers – which provided a temporary boost in early 2012 as buyers brought forward purchases – at the end of March, meanwhile, further contributed to the recent weakness in the property market.
This negative impact will, however, be short-lived, according to Gardner.
‘The decline in activity in recent months echoes the pattern seen at the end of the last stamp duty holiday in December 2009. This provides some comfort that much of the recent softness in housing market activity will subside in the months ahead,’ he said.
The average price of a UK house is now £165,738, down from £166,022 in May.
Regional prices over the past 12 months
|Region||Average price||Annual % change|
|Outer South East||£198,112||-0.40%|
|Yorkshire & Humberside||£134,362||-2.80%|
Earlier this month property website Rightmove reported a 1% increase in house prices in England and Wales.
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