New figures from the Office for National Statistics (ONS) have shown a slump in UK house prices to the lowest annual rate in five years.
UK house prices increased by 3.5 percent in the year to June to £228,000, which is the lowest annual rate since August 2013.
The slowdown in house prices has been driven by the fall in London’s house prices, which are falling at the fastest annual rate since the financial crisis when rent prices in the capital dropped at the fastest rate in eight years, according to the ONS.
London prices dropped 0.7 percent over the year to June. This is the fifth month that house prices in the capital have fallen in 2018.
“House price growth outside of London is being supported by a continuing shortage of stock whereas the capital and the south-east can’t hide behind this excuse any longer,” said Jeremy Leaf, a London estate agent and a former RICS chairman.
“Price drops are continuing and reflect a new realism in the market – if you want to sell your property, it needs to stand out and price is the obvious way of doing it.”
The north-east also saw a low annual growth rate. Prices dropped 0.6 percent in the year to June.
Semi-detached houses saw the biggest increase. Prices increased by 4.4 percent to £216,000 in the year to June.
Flats and maisonettes increased by 0.5 percent to £204,000, which was driven by the price fall in London, which accounts for a quarter of flats and maisonette sales in the UK.