House price growth has dropped to its slowest rate in almost seven years as declining values in London and the South East dragged down the UK average.
Prices increased 0.6 per cent in the year to February while London saw a fall of 3.8 per cent - faster than a 2.2 per cent decline recorded in January and the worst performance in a decade. The average UK home cost £226,000 during the month, £1,000 more than a year ago but the slowest annual rise since September 2012.
Despite declining prices in the capital, it remains the most expensive place in the country to buy a home with an average of £460,000, followed by the South East and the east of England, at £316,000 and £290,000 respectively.
Across England, house prices in the North West grew fastest at 4 per cent followed by the West Midlands which saw a 2.9 per cent annual increase, according to the figures released jointly by the Office for National Statistics (ONS) and Land Registry.
Mike Hardie, head of inflation at the ONS, said: “Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.”
Average prices in Wales jumped 4.1 per cent over the twelve months to reach £160,000 while in Northern Ireland, average increased even faster with a 5.5 per cent rise to £137,000. Scotland registered a decline of 0.2 per cent to reach £146,000 on average.
The lowest average house prices are in the North East at £125,000 and is the only English region where house prices remain below their peak reached before the financial crisis.
Howard Archer, chief economic adviser at EY ITEM Club said the figures “very much fuel the overall impression that the housing market is being hampered as buyer caution amid already challenging conditions is being reinforced by recent heightened Brexit and economic uncertainties.
“Although there are significant variations across regions with the overall picture being dragged down by the weakness in London and the South East“.
He predicted a 1 per cent rise for the coming year but said he “would not be at all surprised” if they stagnate.
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