House prices increased by 1.4% across 2019, says index
House prices ended 2019 1.4% higher than when the year started, according to an index.
Across the UK, the average house price in December was £215,282 – marking a 1.4% annual increase – Nationwide Building Society said.
It was the strongest annual increase seen in just over a year – since November 2018 when there was 1.9% growth.
Economists said Nationwide’s latest figures indicate the housing market is “getting back on its feet”.
Property values edged up by 0.1% month-on-month.
Robert Gardner, Nationwide’s chief economist, said: “Annual UK house price growth edged up as 2019 drew to a close, with prices 1.4% higher than December 2018, the first time it has been above 1% for 12 months.
“Indicators of UK economic activity were fairly volatile for much of 2019, but the underlying pace of growth appeared to slow through the year as a result of weaker global growth and an intensification of Brexit uncertainty.”
The research also found that Scotland was the strongest performer in terms of house price growth in 2019.
House prices in Scotland were up by 2.8% in the fourth quarter of 2019 compared with a year earlier.
It marked the first time since 2008 that Scotland ended the year as the top performer, Nationwide said.
London was the weakest performer, with an annual house price decline of 1.8% in the fourth quarter of 2019.
Mr Gardner continued: “Looking ahead, economic developments will remain the key driver of housing market trends and house prices.
“Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts as well as the outlook for global growth.
“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”
Looking at the challenge buyers face in raising a deposit to get on the property ladder, Mr Gardner said: “Even in the North and Scotland, where property appears most affordable, it would still take someone earning the average wage and saving 15% of their take home pay each month more than five years to save a 20% deposit.
“In Wales and Northern Ireland, it would take prospective buyers nearly seven years, and almost eight years for people living in the West Midlands.
“Reflecting the trend in overall house prices, the deposit challenge is most daunting in the South of England, where it would take an average earner almost a decade to amass a 20% deposit.
“Again, the pressures are most acute in the capital, where someone earning an average income would need around 15 years to save a 20% deposit on the typical London property.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said: “The rise in Nationwide’s measure of year-over-year growth in house prices above 1% for the first time in 12 months is another sign that the housing market is getting back on its feet.”
Howard Archer, chief economic adviser at EY ITEM Club said: “December’s modest rise in house prices followed news that housing market activity spiked in November – which appears to have been influenced by house buyers looking to complete their move before the General Election on December 12 to avoid any potential shocks.”
He continued: “The housing market may get a modest near-term leg up from reduced uncertainties.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Nationwide reports that the housing market held up remarkably well in 2019, assisted by strong employment, low mortgage rates and a lack of supply, which supported prices even in the face of considerable economic and political uncertainty.
“First-time buyers were the big success story of the year, steadily growing in number.
“Lenders are doing their bit, offering higher loan-to-values at competitive rates and more innovative products which enable the bank of mum and dad to offer assistance.
“Being able to afford a mortgage in London remains the biggest challenge, despite the softening of prices there, while outside of the capital it is the deposit which continues to be the issue.”
Here are average house prices across the UK in the fourth quarter of 2019 according to Nationwide Building Society, followed by the annual change:
– Scotland, £151,952, 2.8%
– West Midlands, £193,203, 2.7%
– North East, £129,147, 2.6%
– North West, £163,854, 1.8%
– Yorkshire and the Humber, £160,001, 1.6%
– South West, £248,238, 1.6%
– Wales, £159,322, 1.5%
– Northern Ireland, £141,015, 1.0%
– East Midlands, £185,090, 0.4%
– Outer Metropolitan (includes central/west Kent, north/east/west Surrey, Hertfordshire, south Buckinghamshire and Chilterns and south Essex), £357,665, 0.3%
– East Anglia, £228,234, 0.1%
– Outer South East (includes Brighton and Hove, central Bedfordshire, Oxfordshire, Portsmouth and Southampton), £274,316, minus 1.0%
– London, £458,363, minus 1.8%
Original article by TalkTalk