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Property prices to hold steady in 2013 – Nationwide

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  • 29/11/2012
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Property prices to hold steady in 2013 – Nationwide
House prices remained unchanged in November with prices set to stay flat or decline modestly over the next 12 months, said Nationwide.

Robert Gardner, Nationwide’s chief economist said house prices stayed negative on an annual basis for the ninth month in a row, despite a 0.6% rise in October.

“The predominant theme was 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,” said Gardner.

He explained that with unemployment levels remaining well above normal at 7.8%, against 5.4% in 2007 the economy is struggling to accommodate a growing labour force.

“However, the fact employment is above pre-crisis-levels while economic output is still around three percentage points below its 2008 level, suggests that the pace of job creation may not be maintained at its recent rapid pace,” said Gardner.

“This supports our view that house prices are likely to remain broadly flat or decline modestly over the next 12 months,” he added.

Howard Archer, chief UK + european economist at IHS Global Insight said Bank of England data showed house purchases climbed to a 9-month high of 52,982 in October from 50,415 in September. This is against a 86,000 a month average since 1993.

Archer said the Bank of England’s latest credit conditions survey showed bank’s intentions to lend more in Q4 will build on a substantial increase in the third quarter.

“If the economy can keep on growing following the 1.0% quarter-on-quarter rebound in GDP achieved in the third quarter that would be good news for the housing market, especially if it supports employment,” said Archer.

“However, we are doubtful that the economy can grow fast enough on a sustained basis in the near term at least to really help the housing market,” he said.

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