House price growth started to slow in January, official data from the Office for National Statistics and Land Registry shows.
In the year to January 2020, the average cost of a home rose by 1.3 per cent to £231,000, against a boost of 1.7 per cent in the year to December.
Monthly, typical property prices across the country fell 0.4 per cent, following an increase of 0.6 per cent in December.
The figures, based on mortgage completions, do not take into account of the coronavirus outbreak on the market.
Subdued: House prices started to slow down in January, official data from the ONS has revealed
Growth matters: House price growth in the UK has generally slowed since 2016, the ONS say
In a worst case scenario, some experts think property prices could fall by as much as 20 per cent this year as a result of the pandemic.
The Government has already told all estate and lettings agents to halt viewings and to stop house moves unless they are deemed essential.
Today, the Government extended the scrapping of business rates for a year to estate agents and lettings agents that have closed to help stop the spread of the virus.
Chancellor Rishi Sunak said: ‘We are determined to do whatever it takes to support businesses during Covid-19, which is why we have extended business rates relief for the high street.
‘Today, I am removing some the exclusions for this relief, so that retail, leisure, and hospitality properties that have closed as a result of the measures announced by the Prime Minister in his statement on Monday will now be eligible for the relief.’
Early signs: Coronavirus’ impact on the property market
Today’s figures published by the ONS and Land Registry cover the period up to the end of January, and exclude data covering the last few weeks, when the impact of the pandemic would be slightly clearer.
According to Howard Archer, chief UK economist at the EY Item Club, there have already been some early signs to suggest how the outbreak is dampening the market.
Archer said: ‘The February RICS survey observed that “although near term sales expectations remain positive, optimism has moderated somewhat, with anecdotal evidence suggesting concerns over the economic impact of the coronavirus are weighing on the outlook to some extent”.’
He added: ‘Additionally, Rightmove reported on 20 March that there was a “significant” slowdown in property sales.’
Today, housebuilder Persimmon has announced it has started to wind down all but ‘essential’ construction work on its sites, while rival Bellway is shutting all its 200 construction sites down by the end of Friday.
House prices in the East stutter
On a non-seasonally adjusted basis, average house prices in the UK fell by 1.1 per cent between December and January, compared with a decrease of 0.6 per cent in the same period a year ago.
Average house prices increased over the year in England to £247,000 (1.1 per cent), Wales to £162,000 (2 per cent), Scotland to £152,000 (1.6 per cent) and Northern Ireland to £140,000 (2.5 per cent).
Yorkshire and the Humber saw the biggest rise in house prices, with an annual hike of 3.1 per cent in the year to January.
This was followed by the West Midlands which saw property prices rise 2.6 per cent.
The lowest annual growth was in the East of England, where prices slipped 0.6 per cent in the year to January, followed by the South East of England where prices fell 0.5 per cent.
In London, the average cost of a home rose 1.4 per cent in the year to January, down from a 1.8 per cent increase in December.
London’s house prices fell continuously year-on-year between February 2018 and August 2019, with a peak annual decline of 3 per cent in May.
With an average price tag of £477,000, London still has the highest average property prices in the country.
The North East continued to have the lowest average house price, at £127,000, and is the only English region yet to surpass its pre-economic downturn peak of July 2007
Regional variations: Yorkshire and the Humber saw the strongest house price growth
Property type: Average price shifts by property type in England over the last year
In terms of the type of properties in demand, the price of semi-detached and terraced homes grew by 2.8 and 2.7 per cent respectively across England.
In England, the price of flats and detached homes fell by 1.3 per cent and 0.8 per cent respectively.
Howard Archer, chief economist at the EY Item Club, said: ‘It needs to be noted that the ONS’ measure of house price inflation lags many of the other measures as it is based on mortgage completions.
‘Data are also out for house prices in February, which were firm. The Halifax house prices rose 0.3 per cent month-on-month in February, following an increase of 0.4 per cent month-on-month in January.’
He added: ‘Meanwhile, the Nationwide reported annual house price inflation was at a 19-month high of 2.3 per cent in February (after a rise of 0.3 per cent month-on-month).’
Prices: Average property prices in the UK peaked in the latter half of 2019, the ONS says
High prices: London continues to have the most expensive average property prices in the UK
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