Downbeat official house price figures - but do they show today's market?

Government figures show the UK’s annual house price growth now being down to 2.5 per cent - the lowest rate since July 2013.

The official UK house price index is slower to report than most other indices, but reflects a similar story to others. It says that annual growth in November was 2.7 per cent, falling to 2.5 per cent in December. 

The North East performed worst with prices falling 1.0 per cent in a year, followed by London where prices fell by 0.6 per cent. Growth was strongest in Northern Ireland where prices increased by 5.5 per cent over the year, with Wales at 5.2 per cent and Scotland coming in with an annual rise of 2.4 per cent.

The West Midlands was the best performing English region, up 5.2 per cent in the year to December 2018, followed by the East Midlands and Yorkshire & Humberside, which both saw a hike of 4.2 per cent.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "This reduction in growth is not entirely surprising given that the figures reflect what was happening in November and December when Brexit turmoil was even more frenzied than it is now.”

However, he suggests the picture may have changed since the government’s slightly historic raw data suggests. 

“What has happened since on the high street is that we have seen the release of some pent-up activity and even investors and developers taking a more optimistic view than they have done for some time” adds Leaf.

"The market continues to be underpinned by a shortage of available property and very low interest rates. However, in order to successfully transact, realistic sellers need to make their properties compelling in terms of price, presentation, or both, in order to engage with fewer but more pragmatic purchasers.”

Meanwhile Nick Leeming, chairman of Jackson-Stops, comments that it is remarkable that “we are still left waiting on an outcome on our future outside of the EU with so few weeks to go until Brexit.”

Even so, he adds: “Many branches across the Jackson-Stops consortium are reporting a busy start to the year as both buyers and sellers come to the conclusion that now is as a good a time as any to make a move while interest rates remain relatively low.”

And according to Will Tremlett, senior associate at UK Sotheby’s International Realty: ”While Brexit is clearly a contributing factor, stamp duty is the main culprit in the London market. It is highly alarming that the government has decided to press ahead with the proposed stamp duty levy on foreign buyers … We saw the impact of continued uncertainty from delayed and unsuccessful Brexit votes impact transaction levels, with the number of transactions down in 81 per cent of London boroughs.”