House prices in London edged up just 2.5 per cent in 2017, official figures have shown, giving the capital the lowest regional growth in the UK.
The figures, from the Land Registry, showed UK house prices grew 5.2 per cent in the year to December, up from five per cent the previous month, but down from 5.7 per cent in October.
Meanwhile, price growth in London was below the UK average for the 13th month in a row - although the average house price in the capital was £484,173, compared with £226,756 in the UK as a whole.
Month-on-month, house prices in the UK increased 0.4 per cent in December, up from a 0.2 per cent fall in November.
The figures underscored an already weak housing market: property transaction data showed the number of homes bought and sold across the UK had fallen 0.1 per cent in the year to December, with a 3.9 per cent fall between November and December.
And data from the Royal Institution of Chartered Surveyors (RICS) has shown estate agents expect house price growth to fall in the near term.
"We expect 2018 to be a challenging year for the housing market with activity likely to be lacklustre," said Howard Archer, chief economic adviser to the EY Item Club.
"December’s sharp drop in mortgage approvals suggests that already pressurized housing market activity took a further hit from the Bank of England raising interest rates in early-November.
"Housing market activity has been under pressure from squeezed consumer finances and fragile confidence. It would have been premature for the cutting of stamp duty for first-time buyers in the late-November’s budget to have had any real impact on mortgage approvals in December."