The typical price of a property in Britain has fallen by almost £4,000 over the past four months, dragged down by London and the commuter belt, according to the latest data from the Office for National Statistics (ONS).
Average home values dropped from £232,116 in September 2018 to £228,147 in January 2019. However, London saw the biggest drop - prices fell 1.6% over the year to January 2019, twice as fast as the annual fall of 0.7% recorded in December 2018. This was followed by the East where prices fell 0.2%, the first recorded fall
in the region on an annual basis since October 2011.
Prices continue to rise annually but are at their slowest rate in almost six years
The ONS data showed average house prices in Britain increased by only 1.7% in the year to January 2019, down from 2.2% in December 2018. That’s the lowest annual rate since June 2013, when it was 1.5%, before rebounding thanks to the introduction of the Help to Buy scheme.
The problem is largely due to the south and east of England. “The market is plumbing near six-year lows and Londoners are feeling the worst of it with the gap between house price growth and inflation widening to more than 3%,” said Ewen Bunting, of independent estate agent James Pendleton, who added, “this represents a substantial real terms annual loss. No one was expecting fireworks after new year while the clock runs down on Brexit but things appear to be coming to a head rather earlier than we had initially expected.”
Affordability is still the main obstacle to seeing prices rebound in the capital and while the average price nationally is £228,000, in London it is still more than double that at £472,000. With the average salary in the capital at £35,000, prices are still around 13.5 times average earnings.