House prices up 1% in 2011
UK house prices increased by 1% in 2011, according to Nationwide.
However, property values fell by 0.2% in December, compared to a monthly rise of 0.4% in November, with the typical home now costing £163,822.
Against a backdrop of "anaemic economic growth and a deteriorating labour market", house prices have remained "surprisingly resilient" in 2011, according to Robert Gardner, chief economist at the lender.
London continues to prop up the property market, with prices rising by 5.5% over the year. House prices in the capital are now just 1.6% behind their peak, while in the UK as a whole, prices are 10% behind their all-time high.
At the other end of the spectrum, average house prices in Northern Ireland fell by 8.7% in 2011 - "a marked contrast with the picture of relative stability seen in the UK market as a whole", says Gardner.
Going forward, Gardner says that "2012 isn't shaping up to be much better than 2011", either for the UK economy or the housing market, with little sign of a resolution to the eurozone crisis in sight.
"Deteriorating labour market conditions and elevated inflation are already holding back household spending, while austerity measures are restraining public expenditure," he says.
He adds: "As things stand, the housing market in 2012 looks likely to be characterised by low levels of activity once again, with prices moving sideways or modestly lower over the course of the year."
This article was written for our sister website Money Observer
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).