London house prices fall

London house prices fall

Annual house price growth in the UK has hit 2.8 per cent in November, with the south east of England and the capital pulling down overall national increases, latest official data has shown.

The Office for National Statistics' latest house price inflation index, published this morning (January 16), showed the average price of a property in the UK was £230,630 in the penultimate month of the year. 

The 2.8 per cent overall rise in the month was up slightly on the 2.7 per cent measured in October, but in London, where prices fell by 1.2 per cent in November (year on year), there had been no improvement on the previous month.

London house prices, currently at an average of £472,901, have been falling each month since July 2018 and, combined with a slowdown in the south east, this has put a brake on the overall UK growth.

Meanwhile the Bank of England’s agents’ summary of business conditions for the last quarter of the year reported that along with a low supply of houses, demand was also falling.

Citing from the bank's report, the ONS stated: "Housing activity in southern England was muted due to uncertainty, with transactions postponed until after the European Union withdrawal.

"The demand for new build houses remained stronger outside London, in part due to housebuilders offering more incentive to finalise sales."

The ONS data showed house prices for Wales had increased the most over the 12 months to November at 5.5 percent, while Scotland’s values were up 2.6 percent.

England saw the lowest house price rise, at 2.6 percent.

Kevin Roberts, director of the Legal & General Mortgage Club, said the ongoing political uncertainty was causing some buyers and sellers to take a wait-and-see approach. 

But he said: "A combination of low interest rates and the slowing house price growth we are seeing today should act as a catalyst to encouraging buyers to take action."

Steve Seal, director of sales and marketing at Bluestone Mortgages, said: "Although today’s statistics reveal a slowdown in house price growth, which will be of benefit to first-time buyers, there are still financial barriers preventing access to lending.

"The lack of affordable housing and the time taken to save for a deposit are only a few."

The problem could be exacerbated as lenders begin to exit the market due to problems with financing their loans.

Last week it emerged Fleet Mortgages had pulled its entire mortgage range and Secure Trust Bank announced it was considering to cease new mortgage lending due to adverse conditions.