The pace of house price growth across England and Wales has continued to slow with prices in London now falling at their fastest rate for ten years, since the start of the financial crisis in 2009.
It has prompted concerns, aired on the BBC news, that the ‘ripple’ effect which has happened historically could be seen again.
Land Registry figures show average house prices grew 1.2% annually in May to £229,431, down from 1.5% in April.
Monthly price growth was up just 0.1%.
House price growth was highest in the north-west of England where prices increased by 3.4% in the year to May, up from 3.3% in the year to April.
London was the poorest performer, where prices fell by 4.4% over the year to May, after registering a fall of 1.7% in April.
This is the largest fall since 2009, with the pricing of detached homes in London declining by the most at 6.1%.
The Land Registry also provided an estimate for the number of sales in March, based on around 85% of registered transactions for the month.
Its provisional figures, based on estimates for March and provisional data for the same month last year, suggest sales increased annually by 0.7% in England and 5.0% in Scotland, and fell by 1.2% in Wales and 6% in Northern Ireland.
However, sales volumes still have a long way to go for March to reach the finalised figures for the same month last year.
The Land Registry data showed there were 74,492 provisional transactions across England, Scotland, Wales and Northern Ireland this March, compared with 85,498 registered across the UK in March 2018.
|Country||Provisional data March 2019||Finalised data March 2018|
|Northern Ireland (Quarter 1 – 2019)||4,272||5,471|
Commenting on the data, Richard Donnell, research and insight director for Zoopla, said: “Annual price falls in London are acting as a drag on the headline rate of UK house price growth, but after three years of price falls in London there are signs that the coverage of price falls is starting to narrow, especially looking at growth over the past three months.
“Average residential values in London are bottoming out for now and we predict sales volumes will slowly start to grow across late 2019 and market fluidity will gradually return.
“The north-west’s number one position for annual price growth this month is driven by key cities such as Liverpool and Manchester where prices are rising above the growth in earnings.
“These markets still have scope for further growth in house prices on the back of attractive affordability.
“There is still plenty of demand for housing but the sensitivity of buyers to price levels and political issues such as Brexit varies across the country.”
Nick Leeming, chairman of Jackson-Stops, suggested the market could freeze if Tory leadership front runner Boris Johnson is voted in by Conservative members.
Johnson has said he would cut Stamp Duty, and signalled support for plans to switch the duty from buyers to sellers.
Leeming said: “This could spark a number of today’s buyers to sit on their hands while they wait to see whether these proposals become a reality or remain a pipe dream.”