House price growth slows to lowest rate for more than five years - ONS

Annual house price growth has fallen to its lowest level since 2013, official data showed on Wednesday.

The Office for National Statistics said average house prices increased by 2.5% in the year to December 2018, down from 2.7% in November and the lowest annual rate since July 2013, when it was 2.3%.

“Over the past two years, there has been a slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England,” it added.

“The lowest annual growth was in the North East, where prices fell by 1% over the year to December, down from an increase of 1.7% in November. This was followed by London, where prices fell by 0.6% over the year.”

The average UK house price was £231,000 in December, £6,000 higher than December 2017. On a non-seasonally adjusted basis, average house prices in the UK increased by 0.2% between November and December 2018, compared with an increase of 0.4% during the same period a year earlier.

Mike Hardie, head of inflation at ONS, said: “House prices continued to grow, albeit at the lowest UK annual rate since July 2013, with growth in the North East and London lagging behind Northern Ireland, Wales and the West Midlands.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “A period of falling prices at the national level still isn’t likely. Growth in timelier measures of house price growth from Nationwide, Halifax and Rightmove has slowed, but remained just above zero. Few people are in a position where they have to sell their house in a weak market, thanks to low unemployment.”

“That said, a rebound in price growth isn’t likely after a Brexit deal is done either, given that the Monetary Policy Committee is poised to raise the bank rate again soon after Brexit risk declines. Accordingly, we look for a mere 1.5% rise in house prices over the course of 2019.”

The figures were published alongside the Consumer Price Index, which showed inflation had slipped to 1.8% in January.