House prices end year in stable state – but only if you're outside London
01-01-2015
Mark Leftly Author Biography Associate Business Editor
The worrying boom in house prices has cooled since the summer, boosting hopes that the market will soon return to stable growth, according to Britain’s second biggest mortgage lender.
Nationwide’s chief economist, Robert Gardner, said prices showed signs of returning to 4 per cent annual growth, the historical norm; this year they rose 8.3 per cent.
The recent boom had been fuelled by an improving economy. But although more people felt secure enough to buy homes – and lenders more willing to approve mortgages – housebuilding had remained at its lowest peacetime levels since the 1920s.
In recent months, though, the construction sector has picked up, driven by a sharp rise in public housing projects. As more homes become available and wages continue to outpace inflation, Mr Gardner said, a “comfortable equilibrium” could soon emerge.
Nationwide’s latest quarterly house price index confirmed that London remains a very different market from the rest of the country, with prices rising 2.5 per cent to an average of £406,730 in three months. The typical house in the relatively affluent South-west, for example, was barely half the price at £210,847.
Except in northern England, price growth slowed between October and September; the worst decline was in Wales, where prices fell 0.6 per cent. In the North-west and Yorkshire and Humberside, prices rose 0.3 per cent.
Elfyn Llwyd, Plaid Cymru’s leader in Westminster, said the figures provided further evidence that the Welsh economy continued to lag behind the rest of the UK. Average wages are also “considerably lower” in Wales, he added.
A YouGov poll for Wales Online yesterday found that just 14 per cent of Welsh households think that their financial situation will get better over the next 12 months, against 37 per cent who are expecting a dismal 2015.