London sees strongest growth in the quarter and also over the year with Northern Ireland being the worst performing region for the fourth consecutive year and is now the least expensive UK region.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“Average house prices in the UK rose by a modest 0.3% in the fourth quarter. The annual rate of change increased from -0.5% to 1.1%.
“London saw the strongest quarterly growth rate, with prices up 2.6% quarter-on-quarter. This pushed the annual rate of growth up to 5.4%, making London the best performing region over the past year.
“Most English regions ended the year with prices higher than Q4 2010. Only the North and North West saw price falls, with average prices down 1.0% and 1.2% respectively.
“Scotland saw no change in prices during the quarter, and the annual rate of change remained negative at-0.8%.
“Wales saw a 0.9% fall in prices in Q4. However, thanks to strong growth in previous quarters, average prices ended the year up 1.5%.
“2011 marked another disappointing year for house price performance in Northern Ireland, which was the worst performing region for the fourth consecutive year. Average prices were down 8.9% compared with Q4 2010.
“The 1% rise in house prices recorded over the past twelve months could hardly be described as a strong performance, but against a backdrop of anaemic economic growth and a deteriorating labour market, UK house prices were surprisingly resilient in 2011.”
However, the Nationwide figures contradict data published by the Land Registry's House Price Index showing an annual price decrease of 1.9% which takes the average property value in England and Wales to £160,780.
The Land Registry's report shows the only region in England and Wales to experience an increase in its average property value over the last 12 months is London with a movement of 1.4%.
The most up-to-date figures available show that during September 2011, the number of completed house sales in England and Wales increased by 6% to 61,031 from 57,463 in September 2010.
Matt Hutchinson, director, flat and house share website Spareroom.co.uk, said:
"Many people will be glad to see the back of 2011 in the hope that cometh a New Year, cometh better times for home buyers and sellers.
"Sadly, don't expect too much change in 2012. It may be the year of the London Olympics, but the UK property market is unlikely to make it onto the podium, let alone put in a gold medal performance.
"The next few months may set the tone for the whole of 2012. There are likely to be plenty of New Year bargains on offer for buyers who have the funds - unfortunately those buyers may be few and far between.
"With lenders predicted to start hiking mortgage rates in the face of higher inter-bank lending costs, and the rising cost of living, in particular rental costs, first time buyers will have no option but to dip into their deposit funds, and so it may only be cash rich buyers who can take advantage of a housing market on its knees.
"For the first time buyer, home ownership is likely to remain a distant and forlorn dream."
Nicholas Ayre of UK buying agents, Home Fusion, comments:
"For house prices to stay in the black during a year when the UK and global economy have been on red alert appears impressive.
"But as the Nationwide rightly observes, prices are being supported by low supply and low interest rates. Both are counter-balancing weak demand.
"The 1% annual growth figure is artificial and in no way reflects an underlying strength in the market.
"Interest rates and mortgages are key. If Bank Rate remains at its current level, and if lenders don't go back into their shells, 2012 could see house prices continue to stagnate rather than collapse. That's probably the best we can hope for.
"But with 2012 shaping up to be a brutal year for jobs and the economy, even low interest rates will become less of a support. If the economy deteriorates significantly, house prices in the UK will come under further pressure.
"The areas likely to prove the most resilient during 2012 are, as usual, London and the South East.
"2012 is make or break time for the UK property market."
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains comments on The Land Registry figures:
“2011 has been a tough year for the property market as the annual fall in property values shows. Mortgage lending has remained constrained and this has made it very hard for first time buyers with only limited deposits to get themselves onto the market and boost prices at the lower end. But the second half of the year has provided some positives.
"Mortgage finance is currently highly affordable as lenders have dropped their rates in line with the Bank of England’s commitment to the ultra-low interest rates policy. This means those who can put together a decent-sized deposit are currently able to lock themselves into cheap deals and can obtain properties at relatively affordable prices. The next year will certainly bring its fair share of economic challenges, but buyers should remember there are currently plenty of excellent investment opportunities out there”.
Paul Hunt, managing director of Phoebus Software also comments on The Land Registry figures:
“The rise in prices in December shows that mortgage lenders have not crawled into their shells as a result of the bad economic news that continues to emerge from within the eurozone. According to the CML, annua
