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UK House Price Growth Slowest Since July 2013

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Figures from the Office for National Statistics show that average house prices in the UK increased by 2.7% in the year to October 2018, down from 3.0% in September 2018. This is the lowest annual rate since July 2013 when it was 2.3%. Over the past two years, there has been a slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.

The lowest annual growth was in London, where prices fell by 1.7% over the year to October 2018, up from a fall of 1.8% in the year to September 2018.

The average UK house price was £231,000 in October 2018. This is £6,000 higher than in October 2017. On a non-seasonally adjusted basis, average house prices in the UK fell by 0.2% between September 2018 and October 2018, compared with an increase of 0.1% in average prices during the same period a year earlier (September 2017 and October 2017). On a seasonally adjusted basis, average house prices in the UK increased by 0.2% between September 2018 and October 2018 

England house price growth weaker than rest of UK

House prices in England grew slower than other countries of the UK, increasing by 2.4% in the year to October 2018, down slightly from 2.6% in the year to September 2018, with the average price in England now £248,000. House prices in Wales increased by 3.8% over the last 12 months to reach £161,000. In Scotland, the average price increased by 4.4% over the year to stand at £152,000. The average house price in Northern Ireland currently stands at £135,000, an increase of 4.8% over the year to Quarter 3 (July to Sept) 2018.

Strongest annual growth in the North West, weakest in London

At an English regional level, the North West showed the highest annual growth, with prices increasing by 4.9% in the year to October 2018. This was followed by Yorkshire and The Humber (4.4%).

The English region with the slowest annual growth was in London, where prices fell by 1.7% over the year. London house prices have fallen over the year each month since July 2018.

While annual house price growth in London is slowing, it still remains the most expensive place to buy a house at an average of £474,000, followed by the South East and the East of England, at £327,000 and £295,000 respectively. The North East continues to have the lowest average price at £128,000 and is the only English region yet to surpass its pre-economic downturn peak.

House price growth varies between London boroughs

Falling house prices in London are driven primarily by inner London, for which annual house price growth has been consistently negative since January 2018. In the year to October 2018, house prices in outer London fell by 0.2%, its first annual fall since September 2011. Both inner and outer London seem to follow similar trends in house price growth, with changes in outer London tending to appear slightly after those in inner London.

The Bank of England November inflation report highlights that the slowdown concentrated mainly in the London market since mid-2016 is probably due to the area being disproportionately affected by regulatory and tax changes, and also by lower net migration from the EU. 

Yomdel CEO and Property Expert, Andy Soloman, commented:

“The lowest rate of price growth in over five years suggests that the UK property market is very much treading water at present, with the continued fog of Brexit uncertainty taking the wind from its sails. 

While market sentiment remains weak, the positives are that we have seen an underlying current of buyer demand remain, although this is certainly stronger outside of the south and east of England. While this regional difference is helping to keep heads above water, London remains home to the weakest level of growth and if the market is to regain any meaningful momentum, it needs the primary engine of the capital firing on all cylinders. 

Let’s not forget, that while a stalling level of price growth may reflect a less than stable economic outlook, it is far from the cliff fall of the previous market crash, and this slow but sure reduction in house prices will be welcomed by the many still priced out of the market.”

Source : ONS

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19 December 2018

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