Average house prices in the UK increased by 1.7% in the year to January 2019, down from 2.2% in December 2018, the lowest annual rate since June 2013 when it was 1.5%, ONS’s House Price Index has found.
Over the past two and a half years, there has been a slowdown in UK house price growth, driven mainly by a slowdown in the South and East of England.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said:“After last month’s encouraging figures, this month’s UK HPI is much gloomier, showing once again it is dangerous to read too much into one set of numbers.
“However, we are finding that mood reflected on the ground – a patchy market at best in some areas whereas in other, sometimes even those adjoining, there is more optimism.
“This is borne out perhaps more in the numerous micro markets of London where local factors are often much more relevant than the national picture.
“Today’s inflation figures certainly won’t help affordability calculations for those who are struggling to get onto the ladder, despite recent growth in first-time buyer numbers. Sadly, while political uncertainty remains, stronger demand is likely to remain pent-up at least for a little while longer.”
The lowest annual growth was in London, where prices fell by 1.6% over the year to January 2019, down from a decrease of 0.7% in December 2018. This was followed by the East of England where prices fell by 0.2% over the year.
The average UK house price was £228,000 in January 2019. This is £4,000 higher than January last year. On a non-seasonally adjusted basis, average house prices in the UK decreased by 0.8% between December 2018 and January 2019, compared with a decrease of 0.3% in average prices during the same period a year earlier, December 2017 and January 2018. On a seasonally adjusted basis, average house prices in the UK decreased by 0.2% between December 2018 and January 2019.
The average house price in England is £245,000, an increase of 1.5% over the year to January 2019, down from 1.9% in December 2018.
House prices in Scotland grew at a slower rate than other countries of the UK, increasing by 1.3% in the year to January 2019, down from 2.0% in the year to December 2018, with the average house price in Scotland now £149,000.
House price growth was strongest in Wales, increasing by 4.6% in the year to January 2019 with the average house price at £160,000. This continues to be driven by strong house price growth in south east Wales, likely linked to the abolition of the Severn Bridge tolls.
Northern Ireland house prices increased by 5.5% over the year to Q4, October to December 2018. Northern Ireland remains the cheapest UK country to purchase a property in, with the average house price at £137,000.
House prices in Southern England (London, East of England, South East and South West) fell by 0.2% in the year to January 2019, compared with growth of 4.2% in the Midlands and 2.8% in Northern England (North East, North West, and Yorkshire and The Humber).
While the annual growth rates of the Midlands and the North have slowed slightly over the past three years, Southern England has witnessed a sustained slowdown, with prices in January 2019 falling over the year.
At a regional level the East Midlands showed the highest annual growth, with prices increasing by 4.4% in the year to January 2019. This was followed by the West Midlands (4.0%).
The lowest annual growth was in London, where prices fell by 1.6% over the year to January 2019, down from a fall of 0.7% in December 2018. This was followed by the East of England where prices fell 0.2% over the year, its first fall over the year since October 2011.
While London house prices are falling over the year, the area remains the most expensive place to purchase a property at an average of £472,000, followed by the South East and the East of England, at £321,000 and £288,000 respectively. The North East continues to have the lowest average house price at £125,000 and is the only English region yet to surpass its pre-economic downturn peak.