Annual house price growth at five-year low in December
House prices increased at their slowest annual rate in more than five years in December, according to official figures.
Across the UK, property values increased by 2.5% in the year to December – the lowest annual rate since July 2013 when there was 2.3% growth.
The figures were released jointly by the Office for National Statistics (ONS), the Land Registry and other bodies.
There were variations across nations and regions, with price growth topping 5% in Northern Ireland, Wales and the West Midlands, while the North East of England and London saw values slide lower.
The average UK house price was £231,000 in December.
Over the past two years, there has been a general cooling in price growth, driven mainly by a slowdown in the south and east of England, the report said.
Prices increased by 5.5% in Northern Ireland, 5.2% in Wales, 2.4% in Scotland and 2.3% in England.
The report said price growth in Wales was driven by strong increases in the south east of the country, which was “likely linked” to the abolition of the Severn crossing tolls.
In England, the West Midlands showed the highest growth, with prices increasing by 5.2%, followed by the East Midlands and Yorkshire and the Humber, with 4.2%.
The English region with the slowest growth was the North East, where prices fell by 1%, followed by London, where prices fell by 0.6%, unchanged from November.
London prices have fallen over the year each month since July.
The house price index pointed to a Bank of England report highlighting that the slowdown in the London market since mid-2016 is probably due to the area being disproportionately affected by regulatory and tax changes, and lower net migration from the EU.
While London prices are falling annually, the area remains the most expensive part of the UK to purchase a property, setting buyers back an average of £474,000.
Howard Archer, chief economic adviser at EY ITEM Club, said the latest figures “maintain our view that the housing market is currently under significant pressure with heightened uncertainties focused on Brexit seemingly having some impact”.
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said that on the high street, “we have seen the release of some pent-up activity and even investors and developers taking a more optimistic view than they have done for some time”.
“The market continues to be underpinned by a shortage of available property and very low interest rates.
“However, in order to successfully transact, realistic sellers need to make their properties compelling in terms of price, presentation or both, in order to engage with fewer but more pragmatic purchasers.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “December’s figures confirm a slowdown in house price growth which is not really surprising given the time of year and ongoing Brexit shenanigans.
“The national average figure masks significant regional differences with prices falling in the North East and London, whereas Northern Ireland and Wales experienced relatively strong house price growth.”