UK house prices increase in December
Friday, 31 December 2010 11:26 AM
Residential property prices in Britain have increased for the first time in more than half a year, according to mortgage lender Nationwide.
In its latest house price survey, the building society revealed that average UK values had risen by 0.4 per cent, to a typical asking price of £162,763 in December.
While the improvement more than reversed last month's 0.3 per cent dip in prices, the annual rate remained constant at 0.4 per cent, leaving Britain's residential property growth flat over 2010 as a whole.
The lender's chief economist, Martin Gahbauer, commented: "It would be premature to suggest that the recent downward trend had been broken on the basis of one month's figures."
As the government continues to tighten its grip on public spending, and with banks still reluctant to lend, Nationwide said that a significant improvement in buyer demand would be unlikely in 2011.
"At the moment, there are probably still too few buyers chasing too many properties," it explained.
"On balance, a relatively stable picture, with the possibility of a small price decline, appears the most likely outcome for 2011."
However, Gahbauer warned that UK house prices could see a greater fall if the Bank of England decides to raise its base rate of interest from the current historic low of 0.5 per cent.
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