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Money News
Mixed signals on UK house prices
Wednesday 30 November, 2011
By Martin Fagan
Nationwide says prices “resilient” while Land Registry reports 10th month of price falls.
House prices are weathering the economic storm with values rising again in November, according to the Nationwide Building Society.
Nationwide says its Property Index rose 0.4% in November and 1.6% over the past 12 months, making the average property currently worth £165,798.
However, it was cautious in its optimism for the coming months and said high unemployment, slow wage growth and weak consumer confidence would all have a negative impact on house prices.
In a separate survey of the UK housing market, the October data from Land Registry's flagship House Price Index shows prices were down 0.9% on September and an annual price decrease of 3.2%, which takes the average property value in England and Wales to £159,999.
Meanwhile, the number of mortgages approved for house purchase, but not yet completed, has risen slightly to its highest level for nearly two years.
The Bank of England said there were 52,743 approvals in October, up from 51,193 the previous month and the highest monthly total since December 2009.
“House prices have remained surprisingly resilient in recent months, despite the deterioration in the economic outlook,” said Robert Gardner, Nationwide's chief economist.
“But, with the UK economic recovery expected to remain sluggish well into 2012, house price growth is likely to remain soft, with prices moving sideways or drifting modestly lower over the next twelve months. ”
The different findings of both Nationwide and Land Registry are down to the data each organisation bases its index on. Nationwide - like Halifax - takes its data from mortgage valuations at the point they are approved by the bank or building society.
The Land Registry bases its index on all completed sales and so there is a lag between the mortgage being approved and the sale being completed, which also adds to the discrepancies between the two indices.
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