Average house prices in the UK increased by just 0.6 per cent in the year to February 2019, dropping significantly from the 1.7 per cent growth recorded in January, figures published today revealed.
This is the lowest annual rate since September 2012 when it was reported to be 0.4 per cent. Over the past two years, there has been a slowdown in UK house price growth, fuelled primarily by the stagnation in house prices in the South and East of England, data from the Office for National Statistics found.
The lowest annual growth rate was found in London, where prices fell by 3.8 per cent over the year to February 2019, falling further from the decrease of 2.2 per cent in January 2019. Following behind was the South East, where prices dropped 1.8 per cent over the year.
The average UK house price was £226,000 in February 2019, just £1,000 more than in the same period a year ago. On a non-seasonally adjusted basis, average house prices in the UK decreased by 0.8 per cent between January 2019 and February 2019, compared with an increase of 0.3 per cent in average prices during the same period a year earlier.
When analysing house price growth on a seasonally adjusted basis, average house prices in the UK decreased by 0.4 per cent between January 2019 and February 2019.
Furthermore, the average house price in England increased by 0.4 per cent over the year to February 2019, down from 1.4 per cent in January 2019. House prices in Scotland fell by 0.2 per cent in the year to February 2019, down from a rise of 2.4 per cent in the year to January 2019, with the average house price in Scotland now £146,000.
House price growth was strongest in Wales, increasing by 4.1 per cent in the year to February 2019, with the average house price at £160,000. House prices in Northern Ireland increased by 5.5 per cent over the year to the fourth quarter of 2018. However, Northern Ireland remained the cheapest UK country to purchase a property in, with the average house price at £137,000.
Commenting, Foundation Home Loans marketing director Jeff Knight said: "While the Brexit delay may not exactly unleash a bottleneck of potential buyers, it will certainly help confidence in the market and we can expect to see activity increase over the next few months – particularly out of London. Sellers will be keen to jump on an opportunity to upwardly revise their asking prices as we move towards the Summer months, but there’s a limited window of time before this falters.
"So-called ‘second steppers’ are likely to continue regardless, but for first-time buyers still struggling with limited options, the rental market will remain the long-term choice."
Unmortgage CEO Ray Rafiq Omar added: "The slowdown in house prices isn’t surprising as uncertainty continues to dominate headlines. The market continues to lack any movement, not helped by the stamp duty increases a few years ago for high value homes, with many families choosing to improve rather than move as they can’t move up the housing ladder. Government intervention has been the cause of this house price slowdown - so it remains in the government’s hands to return to domestic policy issues, like housing and homeownership, sooner rather than later.
“We have a clear supply and demand problem which needs to be addressed, causing high prices and limited home ownership in the younger generations - recent research suggests that first-time buyers now need to save for 10 years for a deposit. Worrying as that is, an unaddressed question is what sort of property will they be living in for those 10 years?
“There’s a real need to think outside the box to help those who are stuck renting and badly want to own their own home. The government needs to take greater steps in meeting housebuilding targets and creating some much needed movement within the market.”
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