Official: House price growth slows to five-year low

Christina Hoghton
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Christina Hoghton

Average UK house prices are still rising according to the Government’s own figures, but not everywhere

Average UK house prices in the UK have increased 3.1% in the year to July 2018 – the lowest UK annual rate since August 2013 when it was 3%, according to the UK House Price Index.

The annual growth rate has slowed since mid-2016 and has remained under 5% since, with the single exception of October 2017, according to the official government figures.

The average UK property price hit £231,000 in July 2018, £6,000 higher than in July 2017 and £2,000 higher than in June.

In England, house prices increased 3% over the year to £249,000. Wales saw house prices rise 4.2% to £157,000. In Scotland, the average price increased by 3.2% over the year to stand at £152,000, while the average price in Northern Ireland is £133,000, an increase of 4.4% over the year.

Why the slowdown?

The slowdown over the past two years has been driven by a poor market in the south and east of England dragging down the overall average. The lowest annual growth was in London, where prices decreased by 0.7% over the year, down from an increase of 0.3% in the year to June 2018.

The second-lowest annual growth was in the South East, where prices increased by just 1.8% in the year to July 2018, followed by the East of England, where prices increased by 2.4%.

The North West showed the highest annual growth, with prices up 5.6% in the year to July 2018. It was followed by the South West and West Midlands (both 4.4%).

Sam Mitchell, CEO of online estate agent, said: “These latest figures confirm what we already know, that the north-south divide has been turned on its head.

“While property prices in the north have a spring in their step, driven by inward investment, thriving regional business hubs and a buoyant jobs market, London price growth is in reverse.

“London is firmly a buyers’ market at the moment with heavy price discounting the norm. There is a new reality in the capital that sellers are having to come to terms with.”