UK house prices grew by 1.7% in the year to January 2019, down from 2.2% in the year to December 2018 – the lowest annual growth for the UK since June 2013, when house prices increased by 1.5%.
House price growth was strongest in Wales where prices increased by 4.6% in the year to January 2019, followed by the East Midlands region, increasing by 4.4%. The lowest annual growth was in London, where prices fell by 1.6% over the year to January 2019, down from a fall of 0.7% in December 2018. This was followed by the East of England where prices fell 0.2% over the year, its first fall over the year since October 2011.
The Bank of England’s inflation report for February 2019 noted that activity in the housing market has been subdued. They report the slowdown has been sharpest in the London market which has probably been disproportionately affected by regulatory and tax changes, and by lower net migration from the EU. London house price inflation was also materially above income growth between 2014 and early 2016, reducing affordability.
The Royal Institution of Chartered Surveyors’ (RICS) January 2019 UK Residential Market Survey results continue to signal a subdued market, with enquiries, sales and new instructions all falling further over the month. At the headline level, new buyer enquiries fell for the sixth successive monthly with demand also softening across most of the UK.
The UK Property Transactions Statistics for January 2019 showed that on a seasonally adjusted basis, the number of transactions on residential properties with a value of £40,000 or greater was 101,170. This is 1.3% higher than a year ago. Between December 2018 and January 2019, transactions increased by 0.8%.
The Bank of England’s Money and Credit latest release showed that mortgage approvals for house purchase (an indicator of future lending) increased in January to 66,800, slightly above the average of the previous six months of 65,500.
Headline statistics for January 2019
Average price of a property in the UK was £228,147
Annual price change for a property in the UK was 1.7%
Monthly price change for a property in the UK was -0.8%
Monthly index figure (January 2015 = 100) for the UK was 119.7
Shaun Church, Director at Private Finance said, “While buyers can currently expect to purchase at a reduced price in London, the opposite can be said for the rest of the UK with continued growth across the majority of regions, suggesting there are plenty of investment opportunities elsewhere. The Midlands in particular stands out as a region for investment, with house prices growing by around 4%. Amongst the headlines of falling house prices, it’s therefore important not to overlook the fact that significant pockets of the UK continued to be poised for growth.”