Nationwide

Nationwide

March 30, 2012 13:09 ET

House Price Growth Slows Across Most of the UK

- 7 out of 13 UK regions recorded annual price growth in Q1

- London remains top spot in terms of annual price growth

- Northern Ireland continues to see largest price falls

LONDON, UNITED KINGDOM--(Marketwire - March 30, 2012) -

UK Fact File
Average UK House Price £162,722
Annual percentage change 0.20%
Quarterly change* -0.10%
Most expensive region London
Least expensive region N Ireland
Strongest annual price change London
Weakest annual price change N Ireland
* Seasonally adjusted
(Note that quarterly% changes are revised when seasonal adjustment factors are re-estimated)

Please note that these figures are for the three months to March, therefore will show a different UK average price and annual percentage change to our monthly house price report.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:

"Average house prices in the UK were essentially unchanged in the first quarter, after allowing for usual seasonal effects. The annual rate of change moderated from 1.1% to 0.2%.

"The North saw the strongest quarterly growth rate, with prices up 0.6% quarter-on-quarter. This pushed the annual rate of price change up from -1.0% to 0.8%.

"Apart from the North and the Outer South East, all of the English regions saw their annual rate of house price growth slow during the first quarter.

"House prices increased by 0.5% in Scotland during the quarter, which resulted in a slight improvement in the annual rate of change from -0.8% to -0.2%.

"Wales was the worst performing region on a quarterly basis, with a seasonally adjusted 3.1% fall. On an annual basis, prices were down 2.9% compared with Q1 2011.

"Northern Ireland recorded a third consecutive quarter of price declines. Average prices were down 8.6% year-on-year."

Comparing rents across the English regions

It's a well known fact that UK house prices remain high relative to average incomes. At a national level, house prices are currently 5.1 times average earnings, lower than the peak of 6.4 times, but still above the long-term average of 4.1 times annual earnings. Recently released data from the Valuation Office Agency (VOA) provides a good opportunity to compare rental costs across the English regions.

The data indicates that there is considerable variation in private sector rents across England (see chart). The North is the least expensive, with an average monthly rent of £475, whilst in London they are almost three times higher, at an average of c.£1,300 per month.

Of course, rents are only one side of the affordability calculation. Average earnings are also important in assessing the relative costs of housing, and these also vary significantly by region.

As the chart below illustrates, the pattern of rental affordability shows a close correlation with house purchase affordability. The chart compares the house price to earnings ratio for first time buyers (HPER) with average rents as a percentage of earnings.

The areas where house prices are high relative to earnings are also areas where rents are high relative to earnings.

London stands out as the least affordable English region, with rent taking up nearly 40% of earnings, and average house prices are more than six times earnings. More generally, households in the South of England spend a greater proportion of their income on housing than those in the North of England.

This is important as it provides further evidence that housing more generally is in short supply, reinforcing the idea that any efforts to reinvigorate the housing market should focus on the demand and the supply side of the market.

Regional Headlines

Prices are calculated on a mix adjusted basis

Regions over the quarter
Region Average Price Quarterly % change*
North £114,828 0.60%
Scotland £135,242 0.50%
Outer Metropolitan £243,969 0.00%
North West £134,550 -0.10%
East Midlands £139,113 -0.10%
Outer South East £196,097 -0.10%
South West £182,272 -0.30%
West Midlands £144,130 -0.40%
London £293,375 -0.70%
East Anglia £164,285 -0.70%
York & Humberside £132,128 -0.70%
Northern £109,562 -2.10%
Wales £129,682 -3.10%
UK £162,722 -0.10%
* Seasonally adjusted
Regions over the last 12 months
Region Average Price Annual % change
London £293,375 2.30%
Outer South East £196,097 1.80%
East Anglia £164,285 1.20%
Outer Metropolitan £243,969 1.00%
North £114,828 0.80%
South West £182,272 0.40%
East Midlands £139,113 0.40%
West Midlands £144,130 -0.10%
Scotland £135,242 -0.20%
Yorks & Humberside £132,128 -2.10%
North West £134,550 -2.20%
Wales £129,682 -2.90%
Northern Ireland £109,562 -8.60%
UK £162,722 0.20%
Scotland
Average house price £135,242
Annual percentage change -0.20%
Quarterly change* 0.50%
Most expensive area Edinburgh
Least expensive area Fife
Strongest annual price change Dundee & Angus
Weakest annual price change Perthshire & Stirling
* Seasonally adjusted

Scotland recorded a 0.5% seasonally adjusted increase in the first quarter, resulting in an improvement in the annual rate of change to -0.2%.

Dundee & Angus was the best performing area, with prices up 1% year-on-year. Perthshire & Stirling was the weakest performing area.

Wales
Average house price £129,682
Annual percentage change -2.90%
Quarterly change* -3.10%
Most expensive area Cardiff
Least expensive area Mid & West Wales
Strongest annual price change Cardiff
Weakest annual price change Mid & West Wales
* Seasonally adjusted

Wales was the worst performing UK region in Q1, with a -3.1% seasonally adjusted price decline. Consequently, the annual rate of change fell from +1.5% to -2.9%, making Wales the second weakest region on an annual basis, behind Northern Ireland.

Cardiff, the most expensive area in Wales, was also the strongest performing over the year. Mid & West Wales, which comprises Carmarthenshire, Ceredigion, Pembrokeshire and Powys, is the least expensive part of Wales and continued to see prices fall over the past twelve months.

Northern Ireland
Average house price £109,562
Annual percentage change -8.60%
Quarterly change* -2.10%
Most expensive area City of Belfast
Least expensive area Northern Ireland (West)
Strongest annual price change Northern Ireland (South East)
Weakest annual price change City of Belfast
* Seasonally adjusted

House prices continue to fall in Northern Ireland, with prices in the first quarter of 2012 down 8.6% year-on-year. Average prices have fallen more than 50% from their peak in 2007, and are now similar to the levels prevailing in early 2005.

All areas saw price falls over the year, the largest being the City of Belfast, which saw a 15% year-on-year decline.

London
Average house price £293,375
Annual percentage change 2.30%
Quarterly change* -0.70%
Most expensive area Westminster
Least expensive area Barking & Dagenham
Strongest annual price change Hackney
Weakest annual price change Brent
* Seasonally adjusted

Annual house price growth in London moderated to 2.3% (from 5.4% in Q4 2011), although it remained the best performing UK region.

Hackney saw the strongest growth, with prices up 12% compared with last year. Brent was the weakest performing borough, with a 1% fall in average prices.

England
Average house price £183,392
Annual percentage change 0.70%
Quarterly change* -0.20%
Most expensive area London
Least expensive area North
Strongest annual price change London
Weakest annual price change North West
* Seasonally adjusted

Average house prices in England fell slightly during the first quarter of the year, although they were still up 0.7% compared with the same period in 2011. London remained the best performing region, with a 2.3% annual increase. The majority of English regions have experienced small price rises over the past twelve months, with the exception of the West Midlands, Yorkshire & Humberside and the North West. The North West continues to be the worst performing English region, with prices down 2.2% compared with Q1 2011.

A north/south divide continues to persist, with annual price growth in southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) outpacing that of northern England (West Midlands, East Midlands, Yorkshire & Humberside, North West and North) for the twelfth consecutive quarter.

Amongst England's major towns and cities, Cambridge has seen the strongest price growth over the last twelve months, with prices up 13%. Carlisle remained the worst performing city, with prices falling 5% over the same period.

Major Towns and Cities

Best performing regional towns / cities
Rank Town / City Annual % change Average Price
1 Cambridge 13% £319,884
2 Liverpool 10% £158,500
3 London* 9% £340,439
4 Oxford 9% £338,063
5 St. Albans 8% £362,424
Worst performing regional towns / cities
Rank Town / City Annual % change Average Price
1 Belfast -15% £150,738
2 Edinburgh -6% £234,091
3 Carlisle -5% £135,460
4 Glasgow -4% £155,340
5 Leicester -3% £144,401
* This figure is on a different basis to the London regional index to enable a direct comparison with other towns and cities

Sub Regional Analysis

Just as the national data disguises differences in house prices throughout the UK, looking at the regions disguises movements in local house prices. To look at these developments more closely the areas can be divided into sub-regions.

Scotland
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Aberdeen City £222,868 140% -3% 1%
Aberdeenshire & Moray £158,040 125% -7% -6%
Dunbartonshire & North Lanarkshire £142,654 88% -3% -6%
Dundee & Angus £147,949 120% 0% 1%
Edinburgh City £234,091 81% -6% -6%
Fife £127,045 85% 0% -2%
Glasgow City £155,340 74% -3% -4%
Highlands & Islands £144,177 108% -6% -5%
Lothian & Falkirk £154,959 100% -3% -1%
Perthshire & Stirling £151,949 88% -1% -8%
Renfrewshire & Inverclyde £157,127 96% -3% -2%
South Lanarkshire £133,984 87% -2% -1%
Southern Scotland £127,869 95% -4% -4%
Yorkshire & Humberside
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Bradford £147,415 102% 10% 2%
East Yorkshire £148,785 100% 3% 5%
Leeds £178,230 76% -1% -1%
North Lincolnshire £125,192 102% -4% -1%
North Yorkshire £188,783 88% 3% 1%
Sheffield £168,303 101% 1% 2%
South Yorkshire £133,726 98% 4% 1%
West Yorkshire £140,853 85% -2% -4%
York £203,546 66% 2% -2%
Northern Ireland
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
City of Belfast £150,738 39% -19% -15%
Northern Ireland (North East) £122,504 48% -11% -13%
Northern Ireland (South East) £139,550 44% -16% -12%
Northern Ireland (West) £111,377 54% -12% -12%
Wales
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Cardiff £201,077 72% 1% 1%
Mid & West Wales £143,661 105% -1% -6%
North Wales £153,027 91% -1% -5%
South Wales (East) £146,506 90% 5% 0%
South Wales (West) £152,893 105% 0% 0%
South West
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Bath £248,691 73% 5% 5%
Bournemouth £239,202 61% 7% 8%
Bristol £221,883 79% 4% 3%
Cheltenham £225,280 55% 1% -1%
Cornwall and Isles of Scilly £198,757 84% -1% 1%
Dorset £234,908 69% 3% 4%
Gloucestershire £197,240 60% 2% 3%
North Devon £188,936 68% -2% -2%
Plymouth £172,529 88% 4% 2%
Poole £246,197 58% 5% 1%
Somerset £191,885 67% 0% 2%
South Devon £210,988 78% -2% 0%
South Gloucestershire £209,573 58% -1% 0%
Swindon £177,462 32% 2% 3%
Wiltshire £208,458 50% 4% -1%
North West
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Cheshire £179,464 77% -2% 2%
City of Manchester £189,354 80% -3% 0%
Greater Manchester £157,954 79% 0% -1%
Lancashire £143,609 83% -2% -3%
Merseyside £150,099 89% -1% 1%
Warrington & Halton £162,898 83% 1% 0%
West Midlands
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Birmingham £166,304 67% 1% 1%
Coventry £154,051 71% 0% -3%
Greater Birmingham £161,900 69% 0% -1%
Herefordshire £178,714 65% -2% -1%
Shropshire £162,260 64% -4% -5%
Staffordshire £156,440 74% 1% 3%
Warwickshire £196,023 73% 4% 6%
Worcestershire £184,007 63% 0% -1%
East Midlands
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Derby £153,854 82% 0% -1%
Derbyshire £162,552 88% -1% 4%
Leicestershire £167,568 68% 0% -1%
Mid Lincolnshire £145,460 88% -2% 1%
Northampton Town £164,939 47% 0% -2%
Northamptonshire £170,183 63% 2% 2%
Nottingham £148,358 72% -1% 8%
Nottinghamshire £150,390 78% 2% -3%
South Lincolnshire £148,676 69% 7% 5%
Outer Metropolitan
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Bracknell Forest £260,228 49% -2% 5%
Central Kent £231,986 56% 1% 1%
East Surrey £304,269 53% 2% 3%
Hart & Rushmoor £252,074 49% -1% 0%
Hertfordshire £278,396 65% 7% 6%
Luton £179,921 52% 2% 0%
Medway £181,365 56% 1% 4%
North Surrey £319,241 51% 1% 5%
Reading £248,653 40% 4% 6%
Slough £242,726 39% 0% -4%
South Buckinghamshire & Chilterns £304,240 59% 5% 4%
South Essex £240,106 69% 2% 4%
St Albans £362,424 65% 4% 8%
West Kent £242,434 55% 6% 3%
West Surrey £310,618 49% 1% 0%
West Sussex (North) £259,206 53% 1% 1%
Windsor & Maidenhead £309,006 47% 0% 1%
Wokingham £267,655 37% 1% 0%
London
London Boroughs Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Barking and Dagenham £188,186 54% 5% 3%
Barnet £351,753 74% 8% 7%
Bexley £231,873 64% 2% 5%
Brent £349,418 85% -1% -1%
Bromley £265,061 60% 0% 1%
Camden £573,581 108% 4% 5%
Croydon £237,241 50% 2% 4%
Ealing £349,850 69% 7% 9%
Enfield £284,076 60% 3% 6%
Greenwich £284,550 77% 14% 11%
Hackney £424,968 113% 11% 12%
Hammersmith and Fulham £528,407 79% 12% 7%
Haringey £371,990 72% 3% 5%
Harrow £300,881 58% 9% 6%
Havering £220,250 58% 1% 2%
Hillingdon £280,732 56% 3% 4%
Hounslow £322,060 68% 8% 10%
Islington £514,938 99% 15% 11%
Kingston upon Thames £345,990 73% 5% 5%
Lambeth £357,921 77% 5% 6%
Lewisham £288,426 79% 9% 9%
Merton £338,928 71% 5% 9%
Newham £234,009 69% -3% -1%
Redbridge £274,379 67% 6% 4%
Richmond upon Thames £407,999 72% 3% 2%
Southwark £370,201 76% 3% 4%
Sutton £252,395 50% 2% 1%
Tower Hamlets £419,740 84% -2% 2%
Waltham Forest £255,522 61% 2% 4%
Wandsworth £453,526 76% 3% 9%
Westminster £666,553 90% 12% 11%
Note: City of London and Kensington & Chelsea excluded due to low sample size
East Anglia
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Cambridgeshire £215,660 61% 6% 8%
Norfolk £174,967 65% 2% 2%
Peterborough £158,813 69% 4% 8%
Suffolk £186,923 69% 3% 3%
Outer South East
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
Basingstoke & Deane £237,960 42% 1% 3%
Bedford £188,241 60% 3% 7%
Brighton & Hove £308,233 70% 3% 7%
Central Bedfordshire £208,908 52% 0% 0%
East Kent £190,885 65% -2% 0%
East Sussex £217,007 73% 1% 1%
Isle of Wight £192,051 63% 0% -1%
Mid Hampshire £270,121 57% -1% 1%
Milton Keynes & Aylesbury £226,156 53% 4% 5%
New Forest £261,854 73% -5% 3%
North Essex £208,856 65% 3% 3%
Oxfordshire £274,541 54% 1% 4%
Portsmouth Area £196,685 58% 2% 4%
Southampton Area £218,269 49% 1% 0%
West Berkshire £255,276 39% 1% 1%
West Sussex (South) £238,521 57% 4% 4%
North
Nationwide Sub Regions Price in 2012 Q1 % change over 10 years Annual % change last quarter Annual % change this quarter
County Durham £130,754 96% -3% 0%
Cumbria £153,574 110% -3% -6%
Northumberland £143,577 95% -11% -6%
Teeside £140,180 99% 1% 2%
Tyne and Wear £146,143 81% 0% -1%

Notes

1. Indices and average prices for the UK and the regions are produced using Nationwide's updated mix adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. All changes are nominal and do not allow for inflation. The methodology can be found on our website: http://www.nationwide.co.uk/hpi.

2. Price indices are seasonally adjusted using the US Bureau of the Census X12 method. Quarterly series are seasonally adjusted using data since 1973. The seasonal adjustment is recalculated quarterly and may lead to revisions.

3. The price changes in the sub regional, local authority and major towns and cities tables are based on the price per unit area of the properties in the sample rather than the mix-adjusted methodology used for the 13 regions. The average price per square foot in each of the sub-regions is grossed up by the average square footage in a particular region to arrive at an average house price. Unlike Nationwide's main index, this methodology does not take into account the different mix of properties transacted and is therefore a simplification.

4. Sub-regional figures are therefore not directly comparable with regional prices. Samples are substantially smaller than at a regional level and figures should not be relied upon for any critical application. Due to greater volatility, sub-regional prices are smoothed over two quarters.

5. The Nationwide House Price Index is prepared from information which we believe is collated with care, but no representation is made as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third party commercial purposes do so entirely at their own risk.

Photographs of our economist are available at: http://www.nationwide.co.uk/mediacentre/photolibrary/economists.htm.

About Nationwide Building Society

Nationwide is the world's largest building society as well as the second largest savings provider and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million members.

Since the credit crunch began in 2007, Nationwide has remained profitable against a very difficult economic environment. In the half year ending September 2011 Nationwide made a strong underlying profit of £172 million - up 17% from the previous year. Its strong financial performance and prudent business model means that Nationwide is included in Global Finance magazine's Top 50 Safest Banks in the World.

Nationwide has around 700 branches and customers can manage their finances in branch, on the telephone, internet and post. The Society has around 16,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

To view the charts associated with this release, please visit the following link: http://media3.marketwire.com/docs/NationwidechartsHousing.pdf.

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