U.K. house prices stagnated in December and may record a modest increase in 2013, Acadametrics Ltd. said.
The average price of a home in England and Wales was 227,026 pounds ($366,000) last month, Acadametrics and LSL Property Services Plc (LSL) said in a monthly report published in London today. From a year earlier, values rose 3.2 percent.
U.K. credit conditions have eased and mortgage approvals have risen in a sign the Bank of England’s new credit program may be starting to have an impact. While Acadametrics said 2013 may be a “slightly easier year for mortgage lenders,” it noted that the strength of the economic recovery remains a key factor.
“Much depends on what happens in the macro economy, but from a housing-market perspective and for the moment at least we end 2012 on a positive note, with the general consensus that 2013 will build on that,” said Acadametrics Chairman Peter Williams. “Of course all of this is at a national level. The picture is far less rosy at the regional and local level.”
Acadametrics’s cautious outlook tallies with that of mortgage lender Halifax, which said on Jan. 7 that house prices will probably remain little changed in 2013. Nationwide Building Society said that prices may decline “modestly.”
Acadametrics estimates that there were about 657,000 housing transactions in 2012, compared with 661,165 the previous year. That’s 63 percent of the long-term average from 1995 to 2011, indicating the market “is still operating below its potential, largely due to the difficulties being faced by would- be purchasers in obtaining mortgage finance.”
Out of the 10 regions tracked by Acadametrics and LSL, eight posted increases in the three months through December from the same period a year earlier and two declined, according to the report. London led the gain, with values up 9.9 percent.
“By boosting the national average house price, London disguises the weak state of the housing market in northern areas,” said David Newnes, director of LSL. “If the capital is stripped from the figures, the average increase in house prices during 2012 falls dramatically from 3.2 percent to 1.4 percent - - well below the rate of inflation.”
To contact the reporter on this story: Fergal O’Brien in London at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com