The housing market experienced something of a year of two halves in 2010, with early gains almost entirely wiped out over the last six months.
The first half of the year picked up the upward momentum that was seen over most of 2009, as the lack of properties propped up rising prices, figures from Nationwide show.
The second half of 2010 saw the supply demand imbalance shift towards buyers, however – a possible result of the abolition of HIPS as many indecisive or speculative sellers who may have been put off by the costs incurred decided to put their property up for sale.
This means that over the year as a whole, the average price of a property in the UK has risen by just 0.4%, a figure driven by December's rise of 0.4% in average prices.
At the end of the year, the average cost of a home stands at £162,763.
The three month on three month rate of change – considered to be a smother indicator of the recent trend – rose from -1.3% in November to -1.0% in December.
Many financial analysts and housing experts predicted a flat year in 2010, while slight falls have been forecast for 2011.
"There is little to indicate that buyer demand is set to pick up materially from current levels," said Martin Gahbauer, chief economist at Nationwide.
"At the moment, there are probably still too few buyers chasing too many properties. As a result, the slow drift down in house prices is likely to persist in 2011, at least for the first half of the year.
"Whether it continues into the second half will depend on the flow of new property onto the market. If this dries up – as it did in late 2008 and early 2009 in response to weak demand conditions – prices may begin to stabilise again."
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