House prices remain 'surprisingly resilient' – Nationwide

Nationwide figures have today revealed average UK house prices rose by 0.4% in November and 1.6% on a year ago, adding to the mixed picture across the major house price indices.

The mutual said that house prices have remained "surprisingly resilient" in recent months, despite the economic environment, with November's monthly increase adding to the rise of 0.4% recorded by the mutual in October.

However, figures from across the house price indices offer a confused picture of increasing and decreasing property prices, albeit at low levels.

Hometrack's November results showed house prices fell for the 16th month in a row, down 0.2% and 2.2% year-onyear, while Rightmove research suggested property asking prices fell 3.1% in November.

By comparison, Land Registry figures for England and Wales yesterday showed a 0.9% fall in October, down 3.2% year-on-year, Halifax's October results showed house prices were up 1.2% in the month, but down 1.8% on the same period of 2010, while LSL Property Services and Acadametric' report suggested a small rise in October of 0.2%, but down 1.3% year-on-year.

The average property price in the UK now stands at £165,798, according to Nationwide.

Robert Gardner, chief economist at Nationwide, said: "House prices have remained surprisingly resilient in recent months, despite the deterioration in the economic outlook.

"But, with the UK economic recovery expected to remain sluggish well into 2012, house price growth is likely to remain soft, with prices moving sideways or drifting modestly lower over the next twelve months."

He noted that demand continues to remain very subdued, with house prices being buoyed against the poor economic background by the lack of housing supply in the market.

Gardner added the government policy to support the housing market must strike a balance between demand and supply. With the new build indemnity scheme potentially boosting demand, Gardner said it must be matched by policy efforts to boost house supply to meet the projected growth in households.

Yet, he added: "It is reassuring that steps are being taken to try to address this issue."