House prices across the UK are inching up, but the average is being held back by London, where property is falling in value.
Average UK prices rose by 0.5pc in August, and by 5pc over the last 12 months – slightly lower than the consensus of 5.4pc, according to official data from the Office for National Statistics and the Land Registry.
The median value of a home is now £225,956, the data showed, while also pointing to a “lost decade” of house prices in some regions.
Hansen Lu of Capital Economics said that “with annual house price growth on the other main house price indices coming in at 2pc to 4pc, the official index still looks to be an outlier”.
Samuel Tombs of Pantheon Macroeconomics said that this index, while official, should be treated with caution due to downward revisions of its figures; July’s figures, reported at 5.1pc, were later revised down to 4.5pc. He said that as a result, “near-term strength should be disbelieved”.
He added: “We continue to expect growth in house prices to slow to a snail’s pace over the coming months as mortgage rates creep up, real wages continue to fall and the recent slump in consumer confidence depletes home-seeker numbers.”
The lost house price decade
Analysis of the data for The Telegraph has found that there are 28 local authorities that suffered a “lost decade” of house prices.
The release of the Land Registry data gives a full snapshot of the official house price rollercoaster in the 10 years since the start of the financial crisis, which many date to August 9, 2007, when BNP Paribas froze three of its funds.
The 28 towns and cities where prices remain lower than in 2007 are all in Scotland, Northern Ireland or the North of England; by comparison the average house price in London rose by 62.7pc over same period.
Belfast fared the worst, with house prices 43.7pc lower than where they were in August 2007. This was followed by Hartlepool and Blackpool, where house prices are 19.pc and 16.4pc lower respectively.
Anthony Rushworth, founder of Homegrown, a housebuilding investment platform, said: “This is two-speed Britain in action. It’s now clear that great swathes of the UK have suffered terribly in the aftermath of the financial crash while areas in high demand have shrugged it off and surged ahead.”
