House prices fell 1.8 per cent in London over 2019, according to figures from Nationwide building society showing strong rises in the north and midlands offset weakness in the capital and the home counties.

Annual UK house price growth edged up as the year drew to a close, with prices 1.4 per cent higher than December 2018, the first time it has been above 1 per cent for 12 months.

Nationwide, the UK’s second largest mortgage lender, said it expected prices to remain “broadly flat” over the coming year.

The report showed a clear north-south divide with prices also posting an annual fall of 1 per cent in the outer southeast region.

Scotland was the strongest performing region in 2019, with prices up 2.8 per cent over the year, followed by the west midlands on 2.7 per cent and the north of England on 2.6 per cent.

UK Housing Crisis: in pictures Show all 8 1 /8 UK Housing Crisis: in pictures UK Housing Crisis: in pictures Members of ‘generation rent’, as the younger generation is often known, are finding it far more difficult to get on the housing market than previous generations PA UK Housing Crisis: in pictures Then chancellor George Osborne visits a Help to Buy housing development in Lewisham in 2014. Osborne had announced the Help to Buy scheme in the 2013 budget as a means of helping first-time buyers on to the housing market PA Archive/PA Images UK Housing Crisis: in pictures In February 2017, then communities and local government secretary Sajid Javid issued a government white paper on housing. Introducing it in the Commons, he stated ‘our housing market is broken’ and that ‘the idea of owning or renting a safe, secure place of your own is, for many, a distant dream’ PA UK Housing Crisis: in pictures Residents of Fitzroy Road in Primrose Hill have demonstrated how urban areas might be built up without using extra land. 12 homeowners along the street all agreed to extend their house upwards by 1 floor. The government recently held a consultation on the revised National Planning Policy Framework, which, if approved, will support building above homes, shops and offices Google Earth UK Housing Crisis: in pictures Social Bite, a charity in Scotland, is creating a small housing community for the homeless. Up to 20 people will be housed for 12-18 months, with the charity’s focus being on transitioning the residents into permanent housing and employment AFP/Getty UK Housing Crisis: in pictures A homeless man was found dead yards from Parliament in February. His death was taken by many, including Labour leader Jeremy Corbyn, to be symbolic of the government’s poor record on housing. PA UK Housing Crisis: in pictures Emergency homeless shelters in London had to be opened numerous times throughout the past winter to house those unable to find a room in an ordinary shelter or hostel Getty UK Housing Crisis: in pictures Carillion, the UK’s second largest construction company, entered liquidation early this year. It held numerous government construction and maintenance contracts, for many of which the future is still uncertain AFP/Getty

The housing market was supported by robust labour market conditions, with employment rising at a healthy rate in recent years and earnings growth slowly regaining momentum, it said.

Robert Gardner, Nationwide’s chief economist, said while there had been a recovery in the number of first-time buyers, the main challenge they faced was raising a deposit.

“Even in the north and Scotland, where property appears most affordable, it would still take someone earning the average wage and saving 15 per cent of their take-home pay each month for more than five years to save a 20 per cent deposit.”

Overall, Mr Gardner said the underlying pace of growth appeared to slow through the year as a result of weaker global growth and an intensification of Brexit uncertainty.

“Healthy labour market conditions and low borrowing costs appear to have offset the drag from the uncertain economic outlook,” he said, adding future price moves would depend on how quickly uncertainty about the UK’s future trading relationships lifts as well as the outlook for global growth.

“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next twelve months.”

Figures for mortgage lending from the Bank of England pointed to continued stability. Net mortgage borrowing by households was £4.1bn in November, and the annual growth rate of 3.3 per cent was within the broad range it has been for the last three years.

Separate figures showed new house building dropped for the seventh month running in December. The fall contributed to a contraction in the overall construction sector, according to the monthly purchasing managers index run by the Chartered Institute of Procurement and Supply.

The headline index fell to 44.4 from 45.3 in November on a scale where 50 marks the divide between expansion and contraction. Civil engineering activity fell at its sharpest pace for 10 years while new business volumes also fell.

“House building has been the most resilient category in recent months, but still declined overall during December,” said Tim Moore, economics associate director at IHS Markit, which compiled the survey.