The Nationwide Building Society has published its UK House Price data for January 2013. The Nationwide tends to be the first of the two UK building societies (the other being the Halifax) to produce house price data each month, it is one of the information sources referenced by NAMA’s Long Term Economic Value Regulation and is the source for the UK Residential key market data at the top of this page.
The Nationwide says that the average price of a UK home is now GBP 162,245 (compared to GBP 162,262 in December 2012 and GBP £162,764 at the end of November 2009 – 30th November, 2009 is the Valuation date chosen by NAMA by reference to which it values the Current Market Values of assets underpinning NAMA loans). UK prices are flat over the the past 12 months and are now 12.8% off the peak of GBP £186,044 in October 2007. Interestingly the average house price at the end of January 2013 being GBP £162,245 (or €189,470 at GBP 1 = EUR 1.1648) is 19% above the €159,291 implied by applying the CSO December 2012 index to the PTSB/ESRI peak prices in Ireland.
With the latest release from Nationwide, UK house prices have decline 0.3% since 30th November, 2009, the date chosen by NAMA pursuant to the section 73 of the NAMA Act by reference to which Current Market Values of assets are valued. The NWL Index is now at 781 (because only an estimated 20% of NAMA property in the UK is residential and only 29% of NAMA’s property overall is in the UK, small changes in UK residential have a negligible impact on the index) meaning that average prices of NAMA property must increase by a weighted average of 28.0% for NAMA to breakeven on a gross basis.
According to the Nationwide this morning, the outlook for 2013 is subdued but recent developments in the provision of credit may lift activity slightly
“While activity in the housing market remains muted by historic standards, there have been tentative signs of a pick up in activity in recent months. The Funding for Lending Scheme has achieved some success in bringing down mortgage rates, with some signs of a pick up in lending activity.”
The UK economy is suffering difficulties almost every bit as challenging as those in the EuroZone and Ireland. Sure, they have their own currency and they’ve printed GBP 300bn of it in an economy with a GDP of 1.5tn, to help inflate their problems away. And yet they appear poised for a triple dip recession. In December 2012, the UK’s independent Office for Budget Responsibility published its latest fiscal outlook which forecasts GDP for 2012 at -0.1%, 1.2%, 2.0%, 2.3%, 2.7% and 2.8% (but as with all economic forecasts in the long term, all forecasters forecast a peachy outlook). Deficit:GDP is forecast as -5.7%,-4.6%,-3.7%,-2.8%,-1.4% and -0.4% between 2012-2017. Debt:GDP is forecast at 90.3%, 93.5%, 96.3%, 97.4%, 96.6% and 94.4%. Inflation is forecast at 2.8%,2.5%,2.2% for 2012-2014. It expects residential prices to increase 0.7%/ 3%/ 3.8%/ 4%/ 4% in 2013-2016 and commercial property to change -2.1%, 1.0%, 3.1%.3.6%, 3.9% and 3.5% in 2012-2017.