House price growth at six-year low

Image copyright

House prices rose in February at the weakest rate since September 2012 while in London house prices fell, the Office for National Statistics said.

Average house prices increased by 0.6% in the year to February 2019 but fell by 3.8% in London.

The ONS said inflation was stable at 1.9% in March as a rise in fuel prices from February was offset by falls in food prices.

The figures ease pressure on the Bank of England to raise interest rates.

The Bank of England targets inflation – the rate of price increases – at 2%.

The ONS said there had been a slowdown in house price growth over the past two years.

The average UK house price was £226,000 in February, £1,000 higher than a year ago.

The fall in London house prices was the largest fall since mid-2009, but the city remains the most expensive place to buy property with an average price of £460,000.

Ben Brettell, senior economist at Hargreaves Lansdown, said the fall in London house prices was the largest since the immediate aftermath of the financial crisis.

“This follows efforts by policymakers to cut down on riskier mortgage lending, though clearly uncertainty over Brexit will have played a large part in the capital’s faltering housing market,” he said.

The overall inflation rate, measured by the Consumer Price Index, was lower than the 2% that had been forecast by economists.

Inflation in the games, toys and hobby sector fell to 1.1% in March from 3.1% in February helping to keep a lid on the overall basket of prices, economists said.