By House prices rose at a slower pace in January 2019, according to recent data from the Office for National Statistics (ONS) in its monthly House Price Index (HPI).
The average UK home now costs £228,147, an increase of 1.7 per cent compared to January 2018, which is the slowest annual increase since June 2013.
Regional performance varies
The East and West Midlands saw the largest house price gains in the year to January 2019. The East Midlands saw the highest price increase of all UK regions, rising 4.4 percent, while the West Midlands were close behind, with home price rises of 4 per cent on average.
However, moving south, price gains were much lower. South West houses registered just a 0.5 per cent price rise, while average house prices contracted on an annual basis in London, falling 1.6 per cent.
The average London house still far-exceeds the price of a property in any other region, valued at £472,230 in January 2019. However, prices in the capital have almost stagnated since June 2016, when the UK voted to leave the European Union.
Potential uncertainty weighing on price gains
Jeremy Leaf, former RICS residential chairman, commented on the overall slowdown in price gains by saying: “This month’s UK HPI is much gloomier…a patchy market at best in some areas whereas in others, sometimes even those adjoining, there is more optimism. This is borne out perhaps more in the numerous micro markets of London where local factors are often much more relevant than the national picture.”
Marc von Grundherr, director of the London-based estate agency Benham and Reeves, commented: “Much like Brexit itself, it seems to be one step forward, two steps back where the UK property market is concerned at the moment, and market uncertainty continues to see the rate of price growth decline to its lowest level in almost six years.”
Potential upward pressure on prices
Despite the slowdown, some believe market fundamentals will lead to a continued rise in prices. Kevin Roberts, director of the Legal and General Mortgage Club, commented: “As far as the mortgage market is concerned however, it’s not doom and gloom at all. The current low-interest rate 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.”
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