The annual rate of growth of UK house prices has slowed to its lowest level since September 2012.
Official government data from the Office for National Statistics shows that average UK house prices grew just 0.7 per cent in the year to July - that’s just half of the 1.4 per cent recorded in the year to June.
House price growth was strongest in Wales where prices increased by 4.2 per cent in the year to July, down only slightly from 4.3 per cent in the year to June.
The lowest annual growth was in the North East, where prices fell by 2.9 per cent followed by the South East where prices fell by 2.0 per cent over the year.
The ONS says: “Average house prices in the UK increased by 0.7 per cent in the year to July 2019, down from 1.4 per cent in June 2019. This is the lowest annual rate since September 2012, when it was 0.4 per cent.
“Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.”
According to Richard Donnell, research and insight director at Zoopla, the sluggish growth is down to weaker market sentiment and the strains of poor housing affordability across southern England.
“However, there is still resilience in the housing market. Increased demand for mortgages from home buyers (announced this week for July) shows households still want to get on with their lives regardless of the noise from the Brexit debate. First-time buyers especially, despite the challenges they are facing, are set to be the largest buyer demographic in 2019” he says.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Although these figures relate to a few months ago rather than what is happening now, what is interesting is that they confirm no great changes are happening in the market one way or the other. Prices are slowly increasing, as we might have expected.
“However, there is confirmation of what we are seeing on the high street - that there has been some recovery in the property market in London. Rather than being the worst performing area, it is starting slowly to regain some of its attraction as buyers and sellers look beyond Brexit and try to get on with their lives.”
And Mike Scott from online agency Yopa says: “We now expect that the annual rate of house price growth shown in this report will slow further for the rest of the year, ending the year with house prices virtually identical to the end of last year. However, the economic fundamentals underpinning the housing market remain strong.”
Here’s the ONS breakdown of prices by region for England in July:
- East Midlands: £194,798: up 0.3% since June;
- East of England: £292,444: up 0.1% since June;
- London: £477,813: up 1.0% since June;
- North East: £127,466: down 2.1% since June;
- North West: £166,022: up 1.0% since June;
- South East: £320,454: down 0.7% since June;
- South West: £258,602: up 1.2% since June;
- West Midlands: £199,802: up 1.2% since June;
- Yorkshire and the Humber: £167,181: up 1.9% since June.