For the three months to December 2019, this represented a 0.8 per cent annual change on the average price of a house to £215,925.
Despite London being the most expensive region, the capital saw the weakest change in house prices with a 1.8 per cent decline while the outer South East area experienced a one per cent drop.
In this quarter, Scotland saw the strongest price growth of 2.8 per cent to £151,952, making it the region’s first time to end the year as the top performer.
This was followed by the West Midlands which saw a 2.7 per cent increase to £193,203 and the north, where house prices grew by 2.6 per cent to £129,147.
Robert Gardner, Nationwide’s chief economist, said: “Indicators of UK economic activity were fairly volatile for much of 2019, but the underlying pace of growth appeared to slow through the year as a result of weaker global growth and an intensification of Brexit uncertainty.
“The underlying pace of housing market activity remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to have offset the drag from the uncertain economic outlook.
“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next twelve months.”
Barriers for FTBs remain
Gardner said despite low borrowing costs and a sluggish market, raising a deposit was still a “barrier” to many first-time buyers.
“Even in the North and Scotland, where property appears most affordable, it would still take someone earning the average wage and saving 15 per cent of their take home pay each month for more than five years to save a 20 per cent deposit. In Wales and Northern Ireland, it would take prospective buyers nearly seven years, and almost eight years for people living in the West Midlands.
“Reflecting the trend in overall house prices, the deposit challenge is most daunting in the South of England, where it would take an average earner almost a decade to amass a 20 per cent deposit.”
Adrian Anderson, director of mortgage broker Anderson Harris, added: “Values are still incredibly high compared to income multiples so the bank of Mum and Dad or inheritance has been involved in virtually every first-time buyer mortgage we see.”
Indicator of future growth
Jonathan Samuels, CEO of Octane Capital, said the growth of above one per cent could be seen as an “omen of what’s to come” and said while prices were likely to pick up during the year due to pent-up demand, market performance still depended on the ongoing Brexit negotiations.
“The vital trade negotiations taking place will continue to keep the property market honest. What’s essential is that values don’t suddenly get ahead of themselves,” he added.
David Westgate, group chief executive at Andrews Property Group, said: “The fact that annual price growth was above one per cent for the first time in a year will be seen by many as a positive precursor to 2020.
“In predicting flat price growth during 2020, Nationwide may be underestimating the feel-good factor that has swept the country since the General Election result.”
He added: “2020 could be the beginning of a market cycle that may not peak for at least five years, perhaps even more, and deliver growth of around four per cent a year.”