House price inflation is showing signs of slowing across the whole of the UK after a sharp fall in annual price rises in January.
According to the Office for National Statistics, prices increased by 8.4 per cent in the year to January, to £273,000 – £1,000 below the recent peak in August – although this growth is significantly lower than that seen in the previous four months.
Annual inflation peaked at 12.1 per cent in September before falling to 10.4 per cent in October and then to just under 10 per cent in November and December.
Prices in England rose the fastest in the 12 months to January, growing at 8.5 per cent year-on-year, followed by Scotland, Northern Ireland and Wales at 7.8 per cent, 7.3 per cent and 4.9 per cent respectively.
Annual price inflation in England was driven largely by London, with year-on-year rises of 13 per cent, and to a lesser extent by increases in the East (9.9 per cent) and South-east (7.6 per cent). Excluding London and the South-east, UK house prices rose 6.5 per cent in the 12 months to January.
Legal & General Mortgage Club director Stephen Smith says: “House prices have started this year slightly down on the end of 2014. However, it is worth putting these figures into context as house prices are much higher than they were at the start of 2014 and in many areas are close to their 2007 peak.
“Although homeowners may see price increases as something to celebrate, steep rises are not good for the market. A healthy housing market should grow around the level of inflation to ensure that first-time buyers are able to buy a property and those who have already bought a house are able to move up the housing ladder.”