Housing market in 2012 was a game of two halves
This is according to the latest LSL/Acadametrics house price index which shows that 2012 saw a modest rise in average house prices over the year.
Richard Sexton, director of e.surv said: “Taken as a whole, 2012 was the most encouraging year for the housing market since the financial crisis.
“Prices rose by more than £7,000 over the course of the year, and 2013 looks set to be a slightly easier year for mortgage lenders, which should help improve the availability of finance for house purchases and help boost sales figures.
“But 2012 was a year of two halves. In the first half of the year prices rose 3.2%, but the brakes were slammed down in the second half and brought prices to a complete standstill.
“The Olympics reduced sales activity in the late summer, and mortgage lending to first-time buyers also weakened over the autumn.”
The index showed house prices not moving in December and for the latter half of the year. House prices in 2012 finished 3.2% up on 2011.
It was also a year of geographic split, according to Sexton: “The market in some northern regions remained in a state of near-paralysis thanks to the debilitating combination of public sector cuts, weak private sector growth, and a lack of mortgages for less affluent borrowers.
“In contrast, prices in the south of England, and particularly London, went from strength to strength during 2012. Prices in the capital soared over the course of the year and dragged up the overall national average on their coat tails.
“By boosting the national average house price, London disguises the weak state of the housing market in northern areas. If the capital is stripped from the figures, the average increase in house prices during 2012 falls dramatically from 3.2% to 1.4% – well below the rate of inflation.”