UK house price growth is at its lowest level in almost seven years, with London suffering its biggest decline in a decade.
Official data shows UK house prices increased just 0.6% in the year to February 2019, with the average property costing £226,000 – just £1,000 higher than a year ago. This is down from a 1.7% annual increase in January.
This marks the lowest annual increase since September 2012, according to the Office for National Statistics (ONS) and the Land Registry, who jointly released the figures on Wednesday.
The national slowdown can largely be attributed to a slump in London, where properties suffered a 3.8% decrease in value over the same period. However, property prices in the south-east of England also fell for the first time since 2011, by 1.8%. This largely offset growth in Wales and the west of England.
Mike Hardie, head of inflation at ONS, said: “Annual house price growth has slowed to the lowest rate in close to seven years.
“Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.”
London house prices have been falling annually each month since July 2018, and are now dropping at the fastest rate in a decade. In January, they fell by 2.2% from the previous year, ONS figures show.
However, the city remains the most expensive place in the UK to buy property, with homes costing £460,000 on average.
Brexit uncertainty is thought to be the main cause of stagnation. The Royal Institution of Chartered Surveyors UK Residential Market Survey for November showed decreased activity in the housing market, with Brits saying they would postpone buying or selling until Britain leaves the EU.
Government economists have warned that UK house prices could briefly fall at the end of this year, as a result of Brexit.
ONS data also showed consumer price inflation for March was unexpectedly stable at 1.9%, as higher fuel prices from February offset falls in food prices. This figure falls just below the Bank of England’s 2% target set, but could ease pressure to raise interest rates.