House prices growth in August dropped to its slowest annual rate in more than five years, as London's subdued housing market dragged down average property prices.
New Office for National Statistics (ONS) data out today show house prices climbed 3.2 per cent in the year to August, marking the slowest pace of growth since August 2013.
Stagnation in the capital pulled down the average, with London year-on-year house prices to August falling 0.2 per cent.
Average UK house prices hit £233,000 in August , rising £7,000 higher than the same month last year and £1,000 higher than in July 2018.
Howard Archer, chief economic adviser at EY ITEM club, said: “The fundamentals for house buyers are likely to remain challenging – and they were not helped by the Bank of England hiking interest rates from 0.50 per cent to 0.75 per cent in early-August, even though the share hare of outstanding mortgages on variable interest rates has fallen to a record low around 35%, which is half the peak level of 70 per cent in 2001.
Archer added: “Consumers have faced an extended serious squeeze on purchasing power, which is only gradually easing. Additionally, housing market activity remains hampered by relatively fragile consumer confidence and limited willingness to engage in major transactions.”
However, London remains the region with the highest average house price at £486,000, followed by the South East and the East of England, at £329,000 and £292,000 respectively.
Kevin Roberts, director of the Legal & General Mortgage Club, said: "Slower house price growth is certainly music to buyers’ ears, but challenges remain. Saving for a deposit is still the largest barrier to homeownership, with those in London having to save for up to 17 years if buying alone. Meanwhile, for those further up the ladder, the cost of Stamp Duty is discouraging some homeowners from moving – opting to ‘improve, not move’, instead."