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UK property hotspots of 2012

Rebecca Rutt
by Lovemoney Staff Rebecca Rutt on 27 December 2012  |  Comments 7 comments

Property prices have remained broadly flat this year, so where should you be looking if you're buying or selling?

UK property hotspots of 2012

House prices have been pretty sluggish throughout 2012 and despite a few monthly shifts, the overall picture hasn’t changed much.

This makes it hard to predict what will happen in 2013 and which areas will see the largest rises and falls in prices.

But there are a few factors we can look at, such as the economy and the amount people now need to save for a deposit, to give us some indication as to what will happen in the property market.

House prices by region in 2012

Below are the latest regional results from Nationwide. It puts the average house price at £163,910. London and the South East have fared best, with average prices well above the national average. 

On the other end of the scale Northern Ireland has remained consistently towards the bottom of the table. The average asking price in the region is almost half the price of that in London.

These results cover the whole of the UK and are taken at the post-approval stage of a house purchase.

House prices by region

Region*

Average price

London

£301,168

Outer South East

£200,276

North

£116,624

West Midlands

£146,346

Outer Metropolitan

£247,386

South West

£186,366

East Midlands

£138,977

East Anglia

£164,528

Yorks & Humberside

£134,633

North West

£134,076

Scotland

£132,273

Wales

£132,385

Northern Ireland

£107,719

Average

£163,910

*Nationwide

Yearly house price change

When looking at the annual house prices there hasn’t been much change in the past 12 months.

The following table from Halifax, shows that in every month in the past year prices have dropped, but by very small amounts. For example, the difference between November 2012 and November 2011 is only £15.

Month*

Annual change

Average price

Nov 11

-1.0

160,894

Dec 11

-1.3

159,888

Jan 12

-1.8

160,925

Feb 12

-1.9

160,328

Mar 12

-0.6

163,796

Apr 12

-0.5

160,073

May 12

-0.1

160,781

Jun 12

-0.5

162,104

Jul 12

-0.6

160,961

Aug 12

-0.9

160,142

Sep 12

-1.2

159,467

Oct 12

-1.7

159,313

Nov 12

-1.3

160,879

*Halifax

Economic conditions

One of the main reasons for the slump in market activity is the fragile state of the economy.

Robert Gardner, chief economist for Nationwide, explains that one of the main determinants of housing market conditions is the ability of the economy to generate jobs.

“However, the fact that employment is above pre-crisis levels while economic output is still around 3% below its 2008 level, suggest the pace of job creation may not be maintained at its recent rapid pace,” he says.

Funding for Lending

The Government’s Funding for Lending (FFL) scheme was created to give a boost to the housing market and make more mortgages available.

The £80 billion scheme which was announced in June was designed to offer banks and building societies cheap loans which would then in turn provide lower rates for customers. However, despite this boost – there hasn’t been a great change in prices or transactions since then.

Martin Ellis, housing economist for Halifax said there has been signs the FFL scheme is helping to reduce mortgage rates and it should help to ease credit constraints in 2013, resulting in some improvement in mortgage availability.

This was also echoed by Gardner, and he said housing market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment.

Where to buy

As rents are predicted to rise further, many people may be interested in buying properties and then renting them out. The buy-to-let market has risen substantially this year and on average landlords across the country have 10.7 properties, according to Paragon.

Terraced houses are the most popular, with 58% of landlords owning them, while 53% have flats and 44% own semi-detached houses.

Looking across the country, landlords in the North East have the largest property portfolios with an average of 22.8 properties, followed by those in the East of England with 13.5 and then London with 12.8.

Future predictions

The general consensus seems to be that house prices will remain largely the same or rise slightly. Houses in London, the South East and North West are expected to see modest rises while those in the rest of the country are due to remain pretty much the same.

How well an area does is based on how confident a lender is in the local economy. As further public sector cuts are announced this is having a direct impact on how much people can afford across the country.

David Newnes, director of LSL Property Services, explains that while the North East is likely to struggle, and feel the impact of public sector cuts, stronger economies in London and the South East are likely to make these areas the engine rooms behind any significant improvement in national house prices.

The Royal Institution of Chartered Surveyors (RICS) says prices will rise 2%, while private rents will go up 4%. It thinks there will also be a rise in the number of transactions, to 960,000 from 930,000 in 2012.

Although this is a step in the right direction, it’s way below the level seen before the credit crunch as in 2006 total sales were around 1.67 million.

What do you think?

According to the latest housing market confidence tracker from Halifax, we’re more optimistic about the housing market than we were a year ago.

When asked what would happen to the market in the next year, 35% of people said prices would rise whereas only 20% said they thought they would fall. When it comes to buying, 56% of people agreed the next 12 months would be a good time to buy whereas only 11% thought the same about selling.

The main barriers to buying a house is not being able to raise a deposit, a problem which 58% of potential home buyers face. Job security is also a factor with 51% using this as a reason not to buy whereas 32% said household finances and 31% said availability of mortgages put them off buying.

More on mortgages:

Rising rents and yields, falling mortgage rates: who wouldn't want to be a landlord?

Five mistakes that mean you'll get the wrong mortgage

The world's house price hotspots

Lovemoney Awards: ING Direct is your top mortgage provider

How a divorce affects your mortgage

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Comments (7)

  • Overtone
    Love rating 38
    Overtone said

    Those annual price change figures seem peculiar. I think they mean to show by what percentage the price has dropped since the same month in the previous year. For most months the table doesn't show us what the price was in the same month the year before, but for November 2012 it does. If the avearge house price in November 2012 was only £15 less than in November 2011, then it's fallen by much less than 1.3%. Or, if it HAS gone down by 1.3%, the price has fallen by much more than £15. Or, those figures in the "annual change" column aren't percentages, but in that case what are they?

    What would be really interesting would be a table showing what the Nationwide, Halifiax, RICS, etc. were predicting about house prices at this time each year for the past ten years, and what actually happened in the fiollowing twelve months.

    Report on 27 December 2012  |  Love thisLove  0 loves
  • malcolmsmill
    Love rating 2
    malcolmsmill said

    there are lies, damn lies and....... statistics

    I live in the chorley, lancashire area............ according to the statistics one of the biggest houseprice drops in the uk..

    I look around me and houseprices have risen sharply, year on year

    so HOW does the statistic work???

    In the chorley area we have more than a dozen new "villages" of over 300 houses each....... indeed the next village had a popultion of a little over 1600 people...... BUT in the last 10yrs has built almost 2000 new houses..... more than trebling its size.

    MMy neighbouring houses sell at 200k+ a bungalow sold for 250k was flattened and 150k spent on its replacement.......... so why the statistical drop????????

    simples......... they have built a large number of "low cost" and "starter" houses.... the price drop is caused by this large increase in cheaper housing....... the older and larger houses are still rising at an alarming rate

    Report on 27 December 2012  |  Love thisLove  0 loves
  • Tanni
    Love rating 92
    Tanni said

    These stats are rubbish. All stats can be manipulated using assumed axis of unknowns.

    I for one do not believe Ny government stat or financial institution stats....remember they are all bust and don't forget the Libor scandal, PPI scandal, Insurance scandals, currency manipulation....dodgy governments.

    For a clearer understanding I suggest people check out max Keiser does Westminster. Most of you won't do it, most that do watch it will just not get it and the few that do will never trust or rely on the powers to be ever again. Peace

    Report on 27 December 2012  |  Love thisLove  0 loves
  • nickpike
    Love rating 308
    nickpike said

    Prices rely heavily on government manipulation, from forbearance, to additional funds for loans, acting as guarantor and that magical half percent bank rate, supported only by QE. How much longer can this government keep supporting prices at unaffordable levels? If free market forces were allowed to operate, the economy would get back on its feet far faster, bad debt would get flushed out of the system and house prices would have plummeted already. Well, I'm seeing some nice modern detached properties, albeit north of say Birmingham for less than 150k and you didn't see that 3 or 4 years ago. 2013 is going to be interesting economically. This government is already failing to correct matters, as was always the case, as the economy is so screwed and eventually we will feel the pain. It's all stacking up in the wings, and eventually free market forces will become too large for the government to meddle with. I think anyone who has been encouraged to buy a house since August 2007 has been conned. I see credit crunch 2 approaching.

    Report on 27 December 2012  |  Love thisLove  0 loves
  • nickpike
    Love rating 308
    nickpike said

    Funding for Lending. This gets a bit of a positive review by the fact you leave some important information out. Can you not do some more research? What I mean, and I think the following points are important and give a more balanced view of this scheme, is that only 4.5 billion has been taken up by the banks, and only 0.5 billion has gone towards house buying. Tends to give a very negative effect on the housing market in my view. These figures were from a few weeks ago now, and have not seen any updates, but don't expect anything too different.

    Report on 27 December 2012  |  Love thisLove  0 loves
  • Arblaster
    Love rating 43
    Arblaster said

    When looking at the annual house prices there hasn’t been much change in the past 12 months.

    Oh, yes there has.

    The mean house price starts the year at 160,894 devaluados. It finishes at 160,879 devaluados. Round about the same. Well, no. You are down substantially more. You have not taken inflation into account. As the government continue to print money, the currency is devalued, and that means that the value of your house has depreciated substantially more than fifteen quid. You are being well and truly bilked.

    Report on 28 December 2012  |  Love thisLove  0 loves
  • peter48
    Love rating 4
    peter48 said

    Surely the Govt. and banks are handling a 'big slowdown' as cautiously as they dare. Firstly there is not going to be any increase in prices/rises in house transactions for many, many years to come. Our economy is too fragile dipping into recession during 2012 again, with unemployment/underemployment growing, with further public service cuts and redundancies in 2013, further reductions/removal in benefits including child benefits to the middle class, pay freezes for public service employees or income below inflation levels for many family earners- its all up for residential property ( except for foreigners fleeing to London for our easy tax regime). The elite do not want to tell you this but its knowledge to most. The banks cannot and could not return to the days of easy/bigger loans because they could easily go toxic.The banks are still in intensive care partly helped by us the tax payer. Welcome to the ongoing post-crisis.

    Report on 29 December 2012  |  Love thisLove  0 loves

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