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January saw property prices rise 4.9 per cent year on year in comparison to the 5 per cent seen in January 2017, according to the Office for National Statistics (ONS) data and the Land Registry.
The index found that sales volumes showed large drops. The average UK property value stood at £225,621 in January 2018. This is following a price decline of 0.3 per cent since December 2017.
The most significant change was found in the East Midlands and Scotland. Each area saw prices rise by 7.3 per cent since January 2017. The South West also saw growth of 6.9 per cent.
The region that recorded the slowest growth was found to be the North East at 0.7 per cent, with London pulling slightly ahead at 2.1 per cent.
Sales and marketing director at Onesavings Bank, John Eastgate, commented: ‘The uptick in property price growth has softened in recent months, especially in London where the slowdown has had a disproportionate impact on the national picture.
‘However, the mortgage market remains steady and growth is expected to continue along a modest path this year. With the end of the Term Funding Scheme, a possible May interest rate increase and absence of wage inflation, affordability will continue to be a challenge for potential home buyers.’
There was a sharp decline in sales volumes in January. The most recent data available revealed that the number of sales in the UK fell by 11.3 per cent in comparison to November 2016.
In England, sales volumes fell by 13 per cent from 74,097 to 64,454 in November 2017. In Scotland volumes fell 1.9 per cent from 8,734 to 8,572, Wales dropped by 5.2 per cent from 4,084 to 3,871, and Northern Ireland declined 8.8 per cent from 6,033 to 5,501.
Richard Snook, senior economist at PwC, said: ‘Today’s data give the first insight from the ONS and Land Registry figures for 2018 and show a soft start to the year. While annual growth is positive, prices actually dropped by more than £600 on average from the previous month taking the price of a typical UK house to £225,621. ‘
He continued: ‘Sales volumes in the UK to November 2017 fell 11 per cent compared to the year before, suggesting that prices could weaken in coming months. We are expecting UK wide house price inflation of around 4 per cent in 2018.’