UK Markets closed

UK property hotspots of 2012

House prices have been pretty sluggish throughout 2012 and despite a few monthly shifts, the overall picture hasn’t changed much.

This makes it hard to predict what will happen in 2013 and which areas will see the largest rises and falls in prices.

But there are a few factors we can look at, such as the economy and the amount people now need to save for a deposit, to give us some indication as to what will happen in the property market.

House prices by region in 2012

Below are the latest regional results from Nationwide. It puts the average house price at £163,910. London and the South East have fared best, with average prices well above the national average.

On the other end of the scale Northern Ireland has remained consistently towards the bottom of the table. The average asking price in the region is almost half the price of that in London.

These results cover the whole of the UK and are taken at the post-approval stage of a house purchase.

House prices by region


Average price



Outer South East




West Midlands


Outer Metropolitan


South West


East Midlands


East Anglia


Yorks & Humberside


North West






Northern Ireland





Yearly house price change

When looking at the annual house prices there hasn’t been much change in the past 12 months.

The following table from Halifax, shows that in every month in the past year prices have dropped, but by very small amounts. For example, the difference between November 2012 and November 2011 is only £15.


Annual change

Average price

Nov 11



Dec 11



Jan 12



Feb 12



Mar 12



Apr 12



May 12



Jun 12



Jul 12



Aug 12



Sep 12



Oct 12



Nov 12




Economic conditions

One of the main reasons for the slump in market activity is the fragile state of the economy.

Robert Gardner, chief economist for Nationwide, explains that one of the main determinants of housing market conditions is the ability of the economy to generate jobs.

“However, the fact that employment is above pre-crisis levels while economic output is still around 3% below its 2008 level, suggest the pace of job creation may not be maintained at its recent rapid pace,” he says.

Funding for Lending

The Government’s Funding for Lending (FFL) scheme was created to give a boost to the housing market and make more mortgages available.

The £80 billion scheme which was announced in June was designed to offer banks and building societies cheap loans which would then in turn provide lower rates for customers. However, despite this boost – there hasn’t been a great change in prices or transactions since then.

Martin Ellis, housing economist for Halifax said there has been signs the FFL scheme is helping to reduce mortgage rates and it should help to ease credit constraints in 2013, resulting in some improvement in mortgage availability.

This was also echoed by Gardner, and he said housing market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment.

Where to buy

As rents are predicted to rise further, many people may be interested in buying properties and then renting them out. The buy-to-let market has risen substantially this year and on average landlords across the country have 10.7 properties, according to Paragon.

Terraced houses are the most popular, with 58% of landlords owning them, while 53% have flats and 44% own semi-detached houses.

Looking across the country, landlords in the North East have the largest property portfolios with an average of 22.8 properties, followed by those in the East of England with 13.5 and then London with 12.8.

Future predictions

The general consensus seems to be that house prices will remain largely the same or rise slightly. Houses in London, the South East and North West are expected to see modest rises while those in the rest of the country are due to remain pretty much the same.

How well an area does is based on how confident a lender is in the local economy. As further public sector cuts are announced this is having a direct impact on how much people can afford across the country.

David Newnes, director of LSL Property Services, explains that while the North East is likely to struggle, and feel the impact of public sector cuts, stronger economies in London and the South East are likely to make these areas the engine rooms behind any significant improvement in national house prices.

The Royal Institution of Chartered Surveyors (RICS) says prices will rise 2%, while private rents will go up 4%. It thinks there will also be a rise in the number of transactions, to 960,000 from 930,000 in 2012.

Although this is a step in the right direction, it’s way below the level seen before the credit crunch as in 2006 total sales were around 1.67 million.

What do you think?

According to the latest housing market confidence tracker from Halifax, we’re more optimistic about the housing market than we were a year ago.

When asked what would happen to the market in the next year, 35% of people said prices would rise whereas only 20% said they thought they would fall. When it comes to buying, 56% of people agreed the next 12 months would be a good time to buy whereas only 11% thought the same about selling.

The main barriers to buying a house is not being able to raise a deposit, a problem which 58% of potential home buyers face. Job security is also a factor with 51% using this as a reason not to buy whereas 32% said household finances and 31% said availability of mortgages put them off buying.


Lovemoney Awards: ING Direct is your top mortgage provider

MBNA: Pay 0% for 14 months with a 1.25% fee

Handelsbanken: the great bank you've never heard of