House prices re­vive but Lon­don slows to the low­est rate in the coun­try

The cap­i­tal lags every other UK re­gion, with growth of just 2.8pc, as over­all mar­ket grows 5.1pc

The Daily Telegraph - Business - - Business - By Is­abelle Fraser

HOUSE prices rose across the UK in July as the mar­ket shrugged off un­cer­tainty over Brexit.

How­ever, the rate of growth in Lon­don was slower than every other re­gion of the coun­try. It was the first time this had hap­pened since May 2009.

The Of­fice for Na­tional Sta­tis­tics said that house prices grew 1.1pc be­tween June and July, and the an­nual rate of growth was 5.1pc, the same as last month. It has made a healthy re­cov­ery, af­ter slump­ing to 3.8pc in March, which is be­ing driven by ar­eas be­yond the cap­i­tal.

Lon­don’s rate of growth was 2.8pc in the 12 months to July, and it is be­ing out­paced by every other re­gion in the UK as af­ford­abil­ity in the cap­i­tal is crunched.

Growth rates in the East and West Mid­lands and the South West all soared, thanks to huge de­mand and room for prices to grow. The high­est rate of growth in the coun­try was in the Cotswolds, where house prices soared 16.2pc in the 12 months to July.

Sa­muel Tombs, of Pan­theon Macroe­co­nomics, ques­tioned the of­fi­cial num­bers: “Growth in the of­fi­cial mea­sure of house prices is much stronger than other in­di­ca­tors, mak­ing us sus­pi­cious of the for­mer’s ac­cu­racy. Ac­cord­ing to the Na­tion­wide, Hal­i­fax and LSL/ Aca­data, house prices were up just 2.9pc, 2.5pc and 2.9pc year-over-year re­spec­tively.

“In the­ory, the of­fi­cial mea­sure of prices should be the best barom­e­ter be­cause it is based on all hous­ing trans­ac­tions, re­gard­less of the pur­chase method or whether the prop­erty is new or old. But the of­fi­cial data of­ten are re­vised sub­stan­tially, as only a small sam­ple of prop­er­ties – es­pe­cially for new-build houses – are avail­able for the most re­cent month.”

Thomas Fisher, an econ­o­mist at PwC, said: “Fac­tor­ing in con­tin­ued pres­sure on house­hold in­comes in the sec­ond half of the year, we an­tic­i­pate a likely weak­en­ing in UK house price in­fla­tion to around 4pc on av­er­age for 2017.”

It came as UK Fi­nance said lend­ing for house pur­chases in July was lower than in June but higher than a year ear­lier. First-time buy­ers bor­rowed £5bn, which was 15pc lower than the pre­vi­ous month but up 14pc on last year, and home movers were lent 9pc less than in June but 15pc more than last July.

Re­mort­gag­ing reached its high­est level since Jan­uary, and over the last year this level has been at its high­est since 2009.

Mean­while, re­search from the York­shire Build­ing So­ci­ety has found that 54pc of lo­cal au­thor­i­ties in Great Bri­tain are now more af­ford­able than they were in 2007, tak­ing into ac­count lo­cal house price and earn­ings ra­tios.

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