This fall in UK house price growth is driven mainly by a fall in London. Average house prices in London decreased by 1.0% in the year to February 2018 (down from a 1.3% increase in January 2018), which continues the London slowdown since mid-2016.
The average UK house price was £225,000 in February 2018. This is £9,000 higher than in February 2017 and broadly unchanged from last month.
On a regional basis, London continued to be the region with the highest average house price at £472,000, followed by the South East and the East of England, which stood at £322,000 and £288,000 respectively. The lowest average price continued to be in the North East at £128,000.
The West Midlands showed the highest annual growth, with prices increasing by 7.3% in the year to February 2018. This was followed by the East Midlands (6.3%).
The lowest annual growth was in London, where prices decreased by 1.0% over the year. This is the lowest annual growth in London since September 2009, when it was negative 3.2%. London has shown a general slowdown in its annual growth rate since mid-2016. The second-lowest annual growth was in Yorkshire and The Humber, where prices increased by 3.1% in the year to February 2018.
Craig Hall, New Build Manager, Legal & General Mortgage Club, comments:
“House prices may still be rising, but this more gradual rate of growth should be welcomed. More sustainable price inflation, combined with competitive mortgage rates and an extensive range of products, will help more first time buyers achieve their dream of homeownership. Schemes such as Shared Ownership and Help to Buy are also clearly helping these buyers, with research from the Home Builders Federation showing that 1 in 12 are now using these schemes to get onto the property ladder.
“Whilst we’ve seen genuine commitment from the Government to address our housing crisis, more can still be done to boost housing stock. We therefore urge the Government and housebuilders to continue working together to find innovative solutions. By embracing more modern methods of construction, we can finally begin to close the gap between supply and demand.”
Ishaan Malhi, CEO and founder of online mortgage broker Trussle:
“The slowdown in house price growth across many areas of the UK is no doubt offering some relief to anyone gearing up to buy their first home. We’re also finally beginning to see wages pick up pace, which should be a confidence booster for first-time buyers. This group also needs to bear in mind, though, that there’s a possibility we’ll see two interest rate rises this year. This will impact how much money a new buyer can borrow and could also increase the cost of their monthly mortgage repayments.
“With this in mind, any hopeful first-time buyers should look to lock in a fixed rate mortgage deal as soon as possible. When speaking to a lender or broker, it’s also worth asking what the true cost of each deal is, accounting for any extra charges, such as an arrangement fee. This can make a huge difference. For example, if you were to choose a deal with one of the UK’s big six lenders, and base your decision on true cost rather than the interest rate, you could save almost £400 over two years.”
