The Office of National Statistics has reported that average house prices in the UK increased by 1.7% in the year to January 2019, down from 2.2% in December 2018.
This is the lowest annual rate since June 2013 when it was 1.5%. Over the past two and a half 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 1.6% over the year to January 2019, down from a decrease of 0.7% in December 2018. This was followed by the East of England where prices fell 0.2% over the year.
Kevin Roberts, director of Legal & General Mortgage Club, said: “Today’s figures tell a similar story to that of the last 12 months as house price rises continue at a more subdued level.
“As far as the mortgage market is concerned, however, it’s not doom and gloom at all. The current low-interest climate coupled with increased lender innovation means we’re seeing more and more buyers take their first steps, with the number of first-time buyers hitting a 12-year high last year.
“For any buyers unsure of where to start, speaking to a mortgage adviser is a sensible first step. The value these advisers bring to the mortgage search can be vital. Not only can they access up to ten times as many products than those available directly from lenders, but they can really make a difference in helping borrowers to find the right mortgage for their circumstances and needs.”
Shaun Church, director at Private Finance, added: “Property prices have experienced their weakest growth in almost six years, with London the chief culprit for the national lag. It’s becoming ever more apparent that continued uncertainty around Brexit and the wider global economy is depressing the capital’s property market.
“For the millions of aspiring homeowners that have long been priced out of London, now marks a time of opportunity. Between December and January, buyers saved £1,344 on average when purchasing a property in the capital. While not a windfall, this saving on purchase price combined with stamp duty exemptions, near record low mortgage rates and government initiatives such as Help to Buy, are all helping to make homeownership incrementally more affordable and attainable.
“While buyers can currently expect to purchase at a reduced price in London, the opposite can be said for the rest of the UK with continued growth across the majority of regions, suggesting there are plenty of investment opportunities elsewhere. The Midlands in particular stands out as a region for investment, with house prices growing by around 4%. Amongst the headlines of falling house prices, it’s therefore important not to overlook the fact that significant pockets of the UK continued to be poised for growth.”