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News: UK house prices stay static in November, says Nationwide

Fri, 30 Nov 12

UK house prices stayed static in November, according to Nationwide.

The lender’s latest house price index shows that the average value of property across the country is now £163,853, just 1.2 per cent below November last year and exactly the same as the previous month.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

'The annual rate of house price inflation remained in negative territory for the ninth month in a row in November. However, the pace of decline remained extremely slow, with prices just 1.2% below the level prevailing in November 2011.

'The predominant theme remains one of stability. Indeed, UK house prices were unchanged over the month in November, after taking account of normal seasonal factors. Moreover, annual price growth has remained in a narrow band between +1.5% and -1.5% on all but two occasions over the past two years.

 'In a number of respects the UK labour market has performed much better than expected since the onset of the financial crisis, and this in turn has provided significant support to the housing market.

'The initial surprise was that employment declined by far less over the 2008 to 2010 period than in previous downturns, even though the recession was the deepest and longest on record.

 'The surprises didn’t end there, however, with employment rising strongly over the past twelve months even though the economy was back in recession for much of the period. Indeed, in the three months to September the annual pace of employment growth reached 1.8% - the strongest upturn since 1997.

'While the stronger than expected employment performance helped to support the demand for homes, the most powerful influence on prices has probably been on the supply side of the market.

'The resilience of employment together with the ultra low level of interest rates has been instrumental in preventing a glut of unsold homes from building up on the market and exerting sustained downward pressure on house prices.

'This is not to suggest that labour market conditions imply an easy time for households. While employment has surpassed its pre-crisis peak, the unemployment rate is still well above 'normal' levels, at 7.8% in the three months to September, compared to an average of 5.4% in 2007. This is because the economy still hasn’t been generating jobs fast enough to absorb the natural growth in the labour force.'


See also: Nationwide House Price Index



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