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London house prices at pre-crisis peak

London house prices at pre-crisis peak

Category: Mortgages

Updated: 28/06/2012
First Published: 28/06/2012

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London continues to see house price growth as most other regions in the UK experience falls, new figures released today show.

According to Nationwide's house price index, nine out of the 13 regions in the UK witnessed falling prices over the second quarter of 2012. Bucking the national trend, prices in London increased by 1% quarterly and by 1.2% on an annual basis.

The West Midlands and Outer Metropolitan were the only other regions in the UK to see prices rising, by 0.4% and 0.2% respectively over the quarter.

On a monthly basis, UK house prices fell by 1.5% in June, compared to a 0.2% rise in May, and are 1.5% down on the same point a year ago and 1% down on the quarter.

Prices in London have now recovered to their pre-crisis peak, with the average cost of buying a home in the capital standing at £302,399, compared to a UK average of £164,955.

The index shows the gap between prices in the North and South continues to widen, with Northern Ireland (-10.6%), Wales (-5.3%) and the North West (-4.1%) recording significant annual drops in house prices.

Commenting on the figures, Nationwide's chief economist Robert Gardner said: "The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near term rebound.

"Part of the weakness in house prices may also relate to the ending of the stamp duty holiday in March, which provided a temporary boost in early 2012, as buyers brought forward purchases that would otherwise have taken place later in the year.

"The outlook for house prices remains highly uncertain. Economic conditions are expected to remain challenging over the next twelve months.

"However, policymakers' efforts to bolster the supply of credit to the economy and to help lower the cost should provide support to demand. Moreover, the supply side of the market is still constrained, with construction failing to keep pace with the number of new households being formed."

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