House price growth hits lowest level since 2012
The average UK house price was £233,000 in July 2019, just £2,000 or 0.7 per cent higher than the same period a year ago.
This is the lowest annual rate of increase since September 2012 – when it was 0.4 per cent – and was down from 1.4 per cent in June 2019.
Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by the south and east of England, the ONS noted.
However perhaps more notably, the North East and East of England saw falls in the latest set of results.
The North East saw the steepest falls, down by 2.9 per cent over the year to July, followed by the South East, where prices fell by 2.0 per cent.
This wider slowdown in England was reflected in its average house price rising by only 0.3 per cent in the previous 12 months, which was down from 1.1 per cent in June, to hit £249,000.
Wales and Northern Ireland stay strong
Scotland also witnessed a considerable slowdown, with prices rising 1.4 per cent in the year to July, down from 2.0 per cent in the year to June, with the average house price in Scotland now £154,000.
In contrast, Wales and Northern Ireland continued to see strong growth of 4.2 per cent and 3.5 per cent respectively.
This took the average prices to £165,000 in Wales and £137,000 in Northern Ireland.
ONS head of inflation Mike Hardie said: “Annual growth in house prices slowed to its lowest rate since September 2012, with four of the nine English regions now seeing prices falling over the year.”
The ONS also released its latest data on private rental prices paid by tenants in the UK. Rents rose by 1.3 per cent in the 12 months to August, unchanged since May 2019.
In England, private rental prices grew by 1.3 per cent, Wales saw growth of 1.2 per cent, Scotland witnessed a 0.9 per cent increase, and London private rental prices rose by 0.8 per cent.
Prices likely unchanged for 2019
Mike Scott, chief property analyst at Yopa, the online estate agency, warned this could be the sign of things to come.
“We now expect that the annual rate of house price growth shown in this report will slow further for the rest of the year, ending the year with house prices virtually identical to the end of last year,” he said.
“However, the economic fundamentals underpinning the housing market remain strong, with low mortgage interest rates, good mortgage availability, low unemployment and rising wages, and we do not expect a UK-wide downturn in house prices while those fundamentals remain in place.”
David Westgate, group chief executive at Andrews Property Group, added: “It’s easy to point all the blame for flat price growth at Brexit.
“While Brexit is clearly a factor, we are also at the end of a natural cycle in the market following exceptional growth between 2011 and 2016 caused by low mortgage rates, high employment, Help to Buy and the post-crisis rebound.
“We have been in a slow correction since the EU referendum result but that’s not necessarily a bad thing for the market in the long term. It had got ahead of itself, especially in London and the South East.
“The irony is that now is arguably the best time to buy and sell. Mortgage rates are ultra-competitive and while prices have dropped off, they are holding up fairly well given the political climate.”