Average house prices in the UK increased by a mere 0.9 per cent in the year to June - the lowest annual rate since the Brexit referendum well over three years ago.
The new UK House Price Index shows that on a non-seasonally adjusted basis, average house prices increased by 0.7 per cent between May and June, the same as in May and June 2018; but on a more reliable seasonally adjusted basis, prices increased by just 0.1 per cent.
The East Midlands was the English region with the highest annual growth, increasing by 3.2 per cent in the year to June, followed by the West Midlands up 2.6 per cent.
The lowest annual growth was in London, where prices fell by 2.7 per cent over the year. Average house prices in London have now been falling over the year each month since March 2018 - even during the down financial crisis a year ago the continual price fall was only for 16 months.
Reaction to the news has been mixed.
“Decision-making has been put on hold until more clarity emerges which is reflected in very little movement for property prices this month. What is more concerning is the reduction in number and pace of transactions which are lower than this time last year with once again London acting as a drag on the rest of the market” warns
Jeremy Leaf, north London estate agent and a former RICS residential chairman.
“The data makes it clear that continued uncertainty as we creep ever closer to leaving the EU without a deal has caused hesitancy in some areas of the property markets. Yet, once a firm decision has been made on when the UK will leave the EU and people decide to get on with their lives, we should expect to see a modest uplift in property prices in the new year” says Nick Leeming, chairman of Jackson-Stops.
Howard Archer, chief economic adviser to the EY Item Club, says: “With Brexit due to occur on October 31 – and it’s currently very unclear what will happen then – uncertainty will weigh down on the economy over the next few months at least and hamper the housing market. Consumers may well be particularly cautious about committing to buying a house, especially as house prices are relatively expensive relative to incomes.”
Marc von Grundherr, director of Benham and Reeves, says: "Transaction levels remain muted but steady and while prices aren’t accelerating, they are stable, and we are a world away from seeing a market crash.”
And according to Richard Donnell, research and insight director at Zoopla: “Southern parts of the UK are clearly feeling the impact of London’s weaker growth rippling out, leading to annual house price falls in the South West and South East. This has been driven by an imbalance between supply and demand, as growth in supply is running ahead of transaction levels.
“Although the East and West Midlands are still outperforming other regions due to a healthier balance of supply and demand at present, our analysis shows signs of weaker growth ahead. Birmingham, a key bellwether city, is experiencing a shift in market conditions, with weaker sales growth and rising supply. We anticipate price growth rates to slow in the coming months and the Midlands may not remain the star of the show for long.”