There were a number of positives for the housing market in 2013, not least through the improving prices for bricks and mortar. The latest study from Nationwide has revealed that December saw a 1.4 per cent increase in property values, despite the month usually exhibiting a seasonal lull in activity.
Not only was it an increase in terms of month-on-month totals, prices were also 8.4 per cent higher than they were during the same month in 2012.
Despite the notable improvements in values, house prices are still some way off the figures recorded before the financial crisis in 2007, with a deficit of around five per cent.
According to Nationwide, the average UK house prices stand at £175,826 – although this has not been seasonally adjusted.
In November, Nationwide had previously revealed that house prices had risen 0.6 per cent on a month-by-month basis. The price rise over the past few months, and indeed throughout 2013, have been attributed to the improving sentiment in the market and the increased availability of mortgages.
As revealed by Nationwide’s chief economist Robert Gardner, the second half of 2013 saw average values increase more rapidly. The first six months of the year saw values grow by 0.4 per cent month-on-month, whereas this rose to an average one per cent monthly increase during the final half of 2013.
He also noted that the upturn was not limited to just one area of the country and that the market saw broad improvements.
For the second consecutive quarter, Mr Gardner said that all 13 UK regions saw positive annual house price growth, with London and the south east leading the way.
“Part of the reason for the acceleration in house price growth is that the supply side of the market has not kept pace with the upturn in demand, even though buyer numbers remain subdued by historic standards,” he added.
“Moreover, even in the pre-crisis period, the pace of construction was below that required to keep pace with the increase in the number of households, adding further weight to the notion that the supply side of the market remains constrained.”
Mr Gardner also said the current low-levels of interest rates are encouraging more people to invest in property. He stated that average mortgage repayments are around 29 per cent of take home pay, which is reasonably close to the long-term average.
The improvements throughout 2013 paints a positive picture for the direction of the market as we begin 2014. A more positive attitude to the UK economy is being reflected in the buying activity as well as the construction of new-build properties up and down the country.
Warnings were issued by Mr Gartner however, that property affordability may become overstretched in the coming months if demand continues to outstrip supply.
This suggests that investing in residential property is something that should be done sooner rather than later, so you can make the most out of the money you put in.