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Prices struggling and face more gloom, says Nationwide

House prices are languishing at 12 per cent below their 2007 peak and face another year in the doldrums, Nationwide warned today.

Average property prices sank 0.1 per cent in December to £162,262 after a 1 per cent decline in 2012, according to the mutual's latest index. Despite bright spots such as London – where prices rose 0.7 per cent – Nationwide expects prices to remain "flat or modestly lower" throughout 2013.

The headline figures masked big differences between London and the rest of the country, accentuating the north-south divide in the property market. The capital and the South-west were the only two regions of the UK to have predicted growing house prices next year.