Slow but steady: house prices grow across the UK despite political and economic uncertainty

UK house price growth is slow, but steady, despite mounting economic and political uncertainty, according to the latest data on sale prices released today by the ONS.

The average UK sold property price increased by 4.7 per cent to £221,000, slower than in the same period of last year but consistent with price growth so far this year.

The East of England, stretching from St Albans to Great Yarmouth, had the highest annual sold house price growth, with prices rising 7.5 per cent to £285,000.

By contrast, the average London house price rose by less than half of this – three per cent, to £481,000 – over the same period.

“Today’s housing market data from the ONS and Land Registry shows a gradual slowdown of house price growth, in line with our expectations that growth in 2017 will be around half that of 2016," said PwC senior economist, Richard Snook.

"The key drivers of this slowdown are uncertainty related to Brexit and a softening in the economic outlook."

"This time last year, London was leading the way, with almost 14 per cent annual growth. Today, we see it trailing behind the rest of the country, bar the North East," said Paul Smith, CEO of Haart estate agents.

Mr Smith attributed this to last year's stamp duty changes for owners of multiple homes and noted that landlord registrations are down 52 per cent in London this year.

Nevertheless, wage increases have failed to keep up with house price rises over the past five years, meaning buyers have hit their price ceiling.

As buyers widen their search outside of the capital, demand for homes in commuter areas has increased – along with prices.

“The affordability crisis within London has seen first-time buyers in particular struggling to buy in the capital. In 2016, house prices in London were 13 times median earnings, while the 15 commuter belt towns offer a lower – albeit still high – ratio of nine times earnings," said Snook.

RICS reported that the number of homes for sale was at an all time low, with this lack of supply supporting the modest price rises.

However, Jonathan Hopper, managing director of Garrington Property Finders said that even though the number of homes for sale is at an all-time low, many buyers would rather walk away than pay a penny more than a price they deem favourable.

He said: “The economic backdrop is finely balanced. Mortgages are cheap, but real wages are stuck in reverse – making affordability and home ownership more of a stretch for increasing numbers of would-be buyers... There is still genuine buyer intent, but it is accompanied by acute price sensitivity.”