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House price growth at five-year low fuelled by falling London values

Lana Clements
Written By:
Lana Clements

House price growth in the UK slowed to 2.3% in the year to October, its lowest level since 2013, official data shows.  

The slowdown was driven by falling values in London.

Prices in the capital dropped by 1.7% over the 12 months to October, according to the Office for National Statistics (ONS).

London house prices have been falling on an annual basis since July, which is likely the impact of tax and regulatory changes, the ONS said.

Between September and October values across the country dipped by 0.2%, taking the average property’s worth to £231,095.

The North West experienced the biggest price rises over the year, as values jumped by 4.9%.

Gloomy outlook for 2019

The figures suggest prices could soften across the UK next year, experts said.

Chris Sykes, mortgage analyst at Private Finance said: “London’s property market in 2018 has been a tale of two cities.

“While outer London house prices have remained relatively resilient over the course of the year, inner London – a hub for both foreign and domestic investment – has been hit hard.

“Punitive measures imposed on buy-to-let investors combined with the prospect of the UK crashing out of the EU has dissuaded potential property investors.”

He warned the wider UK market often takes its lead from London, which does not bode well for the months ahead.

Sykes added: “With property prices acting as an important barometer of strength for the broader UK economy, these figures will be a source of discomfort for some.

“However, for first-time buyers that have long been priced out of the property market, this ongoing uncertainty marks a time of opportunity, as they gain some respite from soaring house prices.”