Report shows end-of-year rebound for house values, but still £21,000 below peak House prices ended 2010 broadly flat – with widening regional disparities and the prospect of weak or stagnant property values in 2011, as public spending cuts and job losses depress the market, especially outside the South and the East. The Nationwide Building Society's latest index of house prices shows a slight, 0.4 per cent, rise in average values in December, seasonally adjusted. Following falls of 0.7 per cent in October and 0.3 per cent in November, it leaves the trend over 2010 broadly flat. The average UK property as the year closed was worth £162,763, some 0.4 per cent up on the end of 2009. Overall, prices are down 11.3 per cent on the peaks they scaled in the third quarter of 2007: the average British household has lost about £21,000 of the value of their home since then. Experts say prices could fall another few thousands next year, especially in areas where the public sector has been a large employer, such as Northern Ireland. The peak-to-trough fall still looks like being less severe than in the 1989-93 property recession, which saw 20 per cent knocked off values. Some parts of the country are doing very much better, and some worse than the general picture. Of the cities, Oxford and St Albans were the best performers of 2010, followed by Liverpool, Bath, Nottingham and Manchester – up by between 5 and 9 per cent. Yet prices in Newcastle fell 4 per cent, with Sheffield, Bradford, Belfast and Glasgow also registering modest drops. County-level data from the Halifax, also published yesterday, reveals Conwy, in North Wales, as the UK's property hot spot – up 13 per cent, with East Dunbartonshire and Dumfries-Galloway not far behind. One beneficiary of the Conwy boomlet may be the smallest house in Britain, measuring 3.05m by 1.8m, according to the Guinness World Records book. Regionally, East Anglia came top last year (up 3.8 per cent), and Northern Ireland bottom (down 8.9 per cent). The 2006-07 "gold rush" on the Shankhill Road as prices caught up with booms to the south and on the UK mainland seems to have been consigned to history. Within London, and outside the "super prime" sector, Ealing was the star, up 10 per cent. Surrey is the most expensive county in the country, with an average house price of £296,344: Blaenau Gwent is the cheapest, at £86,385. On a five-year view, oil-town Aberdeen is the clear winner – up 40 per cent on 2005; south Lincolnshire and Nottingham are the big losers, about 10 per cent down. Even those in the industry see little chance of a return to boom times. Rising unemployment – expected to hit a 17-year high – a shortage of bank lending and perhaps higher interest rates by the end of 2011 will dampen a slow market, though a shortage of supply, as in 2009, may underpin values for a time. Suren Thiru, housing economist at Halifax, commented: "Looking forward, we predict that UK house prices at the end of 2011 will be at a broadly similar level to that at the end of 2010. House prices outside southern England are likely to be constrained by a greater dependence on public sector employment at a time when this sector will be under pressure due to the public spending reductions." Howard Archer, chief economist at HIS Global Insight, added: "House prices are unlikely to crash but will trend down relatively gradually and fall by 5.7 per cent in 2011." "There are some signs that the number of properties coming on to the market is starting to dip, which could provide support to prices. At the moment, buyer inquiries are slowing more. Although we do not expect the Bank of England to start raising rates before the fourth quarter of 2011, there is a risk that well-above target inflation could lead to earlier action."Property prices set for further falls in 2011
Sunday, 2 January 2011
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