Property price growth remained flat in the month to November at 0%, indicating that there is continuing volatility in UK’s housing market.
The latest figures from Nationwide’s House Price Index come after an increase of 0.6% in October, and mean that the price of a typical home has now reached £163,853. In the year to November house prices fell by 1.2%.
Robert Gardner, Nationwide’s Chief Economist, argues that although the figures appear negative, the housing market is in fact beginning to stabilise.:
“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,” he said.
“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.”
This idea is supported by recent forecasts from estate agent Knight Frank, which argues that the housing market is tipped to make a gradual recovery over the coming years, with property prices set to return to pre-crisis levels in less than a decade.
The predictions reveal that property prices will return to levels seen before the height of the financial crisis by 2019, although the housing market will take until 2031 to reach 2007 levels in real terms, once inflation is stripped out.
The research also outlined that transactions are likely to increase by just 2% next year, as buyers who require higher loan-to-value ratios struggle to get on to the first rung of the property ladder.
Knight Frank head of UK residential research Gráinne Gilmore, said: “Transaction levels have roughly halved since the last market peak in 2007, and are 35% below the 20 year average, as first-time buyers and those further up the housing ladder struggle with tighter mortgage lending rules.”