House prices rise 1.4% year-on-year

There was good news for homeowners today as the latest Nationwide House Price Index revealed that house prices rose by 1.4% year-on-year in December, the first time it has been above 1% for 12 months.

While this is a positive start to 2020 for homeowners, political and economic uncertainty is still expected to impact the housing market this year. Robert Gardner, chief economist at Nationwide, said: “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.”

According to data from the latest Nationwide House Price Index, London was the worst performing UK region during 2019, while Scotland saw the strongest growth last year, the first time since 2008 that it has been the top performing region. Gardner added: “Wales saw a further slowing in its annual rate of house price growth to 1.5%, from 2.9% in the third quarter. Price growth also continued to moderate in Northern Ireland, with average prices up 1% over the year, down from 3.4% in Q3. England remained the weakest performing home nation, with prices up just 0.2% compared with a year ago.

“London ended the year as the weakest performing region, with an annual price decline of 1.8%. While this marks the tenth quarter in a row that prices have fallen in the capital, they are still only around 5% below the all-time highs recorded in Q1 2017 and c50% above their 2007 levels (UK prices are only around 17% higher than their 2007 peak).

“By contrast, house price growth returned to positive territory in the neighbouring Outer Metropolitan region (which includes places such as Slough, Guildford, Crawley and Chelmsford) after five consecutive quarters of falls, with a modest 0.3% gain. However, the surrounding Outer South East region (which includes cities such as Brighton, Southampton and Oxford) saw a 1% annual decline.

“The West Midlands was the best performing English region, with prices increasing by 2.7% over 2019. This was closely followed by the North, where prices were up 2.6%. Overall however, the annual rate of change among the English regions remained within a fairly narrow range of -2% to 3%.”