UK house prices grew at a slower pace in June, yet remained close to the average rate of five per cent seen since the beginning of this year, according to the latest official data compiled by the Office for National Statistics (ONS).

UK experiences two speed housing market as London slows

Slowdowns in prices were recorded in London and NE England although, across the country, the average stood at £223,000 in June, about £2,000 up on the previous month, almost £10,000 higher than a year ago – a year-on-year growth of 4.9 per cent.London saw a month-on-month £3,000 drop in prices to £482,000 in June, representing an annual increase of only 2.9 per cent. In NE England, the annual rate was even lower at 2.5 per cent, bringing the average home price there to £130,000, the lowest in the country.By comparison, the East of England region notched up growth of 7.2 per cent in the year to June, while the East Midlands recorded an annual average rise of 7.1 per cent.Among individual boroughs, London’s Kensington & Chelsea in London was the UK’s most expensive with an average cost of £1.4 million. The cheapest was Blaenau Gwent in south Wales, where a house cost an average of £80,000.

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Lucy Pendleton, founder director of London estate agents James Pendleton, said, “There’s the slightest hint of a two-speed housing market here with the UK upping the pace of growth annually and monthly while London touched the brakes.“Perhaps it¹s not surprising to see the London market, after such strong gains, buck the national trend and slow down a little more in a general election month. However, the market is not lurching and there is still strong demand.“The trailblazing East of England posting annual growth of more than 7 per cent is an obvious sign of confidence outside the capital.“There are headwinds but it’s important to remember interest rates have not yet gone up, we still have the Help To Buy Scheme and the more hazardous economic effects of Brexit have not begun to materialise.“That’s why this isn’t yet a nerve-jangling tightrope walk between buyers and sellers attempting to face off against each other. Armies in both camps are dancing arm-in-arm and seem content with where the market is right now.”

Drop in London causes concern but not a shock

Jonathan Hopper, managing director of Garrington Property Finders, commented, “After the previous month’s data showed a decline in London’s house prices, it¹s concerning but not surprising to see a further – and more pronounced – fall in the capital’s prices in June.“For years, London’s property market seemed to know no bounds, but for two consecutive months the capital has seen a deceleration in prices, forcing sellers to adjust their pricing in keeping with a new reality.“There is a degree of inevitability about prices cooling, as house price inflation in the capital raced ahead of wage inflation for several years, but ultimately this situation was always going to be unsustainable.“Across the country as a whole, house prices remained largely flat, although a few regions outside of London also experienced a slowdown in property price growth.“Although the ongoing lack of supply has continued to prop up prices, in practice there are many buyers closely watching these movements in the market and managing to secure weighty discounts. Sellers who are conscious of this and are both pragmatic and flexible in their approach to pricing are most likely to guarantee a sale in today’s market.”For related news and features, visit our Residential Property section.

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