House prices 'contrast across UK'

House prices in England outperformed the rest of the UK in 2012, while Northern Ireland recorded falls of up to 10%, Nationwide has said.

The building society's study also found evidence that the north/south divide in England is widening, with the price of a typical home in the south now standing at a new high of around £95,000 more than in the north, representing a 2% increase compared with the end of 2011.

Across the UK, house prices fell by 0.1% month-on-month in December and they are likely to remain flat or edge lower still during 2013, Nationwide predicts.

The monthly decline meant that at £162,262 on average, prices dropped by 1% over 2012, reversing a 1% increase recorded in 2011.

Sharp contrasts in the performance of the housing market were highlighted across the UK, with prices increasing by 6% annually in Cambridge, as they plummeted by 10% across County Armagh and County Down and by 9% in Bradford.

Overall, prices in England declined by 0.4% over 2012 to reach £186,390, making England the most resilient of the home nations. Wales saw a 2.7% annual fall in prices to reach £131,630 on average and prices also dipped by 3.3% in Scotland to £131,795.

Prices plummeted by 8.2% in Northern Ireland year-on-year to £104,282, leaving them more than 50% below their 2007 highs.

Recent lending figures have shown a pick-up in mortgage approvals to home buyers and the Council of Mortgage Lenders (CML) has said it expects the housing market to "feel more stable and positive" in 2013, amid recently-launched Government schemes to boost lending.

Robert Gardner, Nationwide's chief economist, said that the market is likely to remain sluggish amid the difficult economy.

He said: "With the economic recovery expected to remain fairly weak, the housing market is likely to be characterised by low levels of activity again in 2013, with prices remaining flat or modestly lower over the course of the year."