The slowdown in the housing market continued in May, with annual house price growth of just 3 per cent, the lowest rate of growth for almost five years.
The latest ONS figures – based on Land Registry data – show that the annual rate of increase was down from 3.5 per cent in April. This is the lowest annual growth rate since August 2013
Annual growth rate has slowed since mid-206 and, with the exception of October 2017, has remained below 5 per cent throughout 2017 and 2018.
The figures show this slowdown was driven by a softer market in the south and south east. The weakest growth was in London, where prices fell by 0.4 per cent over the 12 months to the end of May. This is the fourth consecutive month that prices have fallen in the capital according to the ONS.
The average house price in the UK stood at £226,000 in May. This is £6,000 higher than in May 2017 and unchanged from the previous month.
On a seasonally adjusted basis average house prices in the UK decreased by 0.2 per cent between April and May this year, compared with an increase of 0.4 per cent during the same period last year.
This ONS house price index shows that the biggest growth in prices was for detached properties, where prices have risen by 4.6 per cent in the year to May 2018. The average detached property is now priced at £344,000.
In contrast the price of flats and maisonettes remained unchanged over the year at £203,000. Weaker growth in this sector was driven by negative annual growth in London for this property type. The ONS says that around a quarter of all flat and maisonette transactions are in the capital.
The ONS figures show that Scotland had the highest house price growth over the past year, with prices rising by 4.9 per cent. The average property in the country is now priced at £149,000.
In contrast the average house price growth in England stood at 2.9 per cent and in Wales it was just 1 per cent. The average property England is now £244,000; while in Wales it is £149,000.
In Northern Ireland the average property is priced at £130,000 – an increase of 4.2 per cent over the year to quarter one.
Within England the East Midlands showed the highest annual growth, with prices increased by 6.3 per cent to May 2018. This was followed by the West Midlands, which saw annual growth in house prices of 5 per cent.
After London the area with the weakest growth was the North East where prices increased by 1.3 per cent in the year to May 2018.
Foundation Home Loans marketing director Jeff Knight says: “There may be new properties coming onto the market, but we need to wait until demand picks up to gather an accurate view.
“Those in a position to buy will certainly benefit from the choice available but that’s not to say that affordability is anywhere near what it should be, even at this stage.”
Online mortgage broker Trussle’s founder Ishaan Malhi adds: “House prices are rising at a slower pace that they have been over the past few decades. While we’re beginning to see property prices stabilise, purchasing a first home still feels like a huge leap for many.
“More needs to be done to help people get onto the property ladder during uncertain times. With the appointment of yet another new housing minister, confidence in the housing market remains low.”
Landbay chief executive John Goodall says: “House prices succumbed to an early summer slowdown in May, helping to provide a slight respite for those hoping to get a foot on the property ladder.”