London house prices suffer largest drop in nine years

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Annual house price growth across the country slowed to its lowest level in almost five years in June, ONS figures also showed.

House prices in June rose by an annual 3.0 percent across the United Kingdom as a whole, the weakest increase since August 2013.

Shaun Church, director at mortgage broker Private Finance said: 'A slight correction in house prices is no bad thing for the United Kingdom property market.

The data also shows that London experienced the most significant annual fall in the United Kingdom, at minus 0.7 per cent - the lowest annual growth rate for the region since September 2009 (-3.2 per cent).

At the pump, petrol prices fell by 0.8p month-on-month to 127.2p per litre, while diesel prices dropped by 0.5p to 131.6p per litre.

Retail inflation fell to nine-month low of 4.17 per cent in July on account of slowdown in prices of vegetables and fruits, said government data released today.

The average United Kingdom house price in June was £228,000.

London continued to be the region with the highest average house price at GBP 477,000, followed by the South East and the East of England.

Mike Hardie, head of inflation at the ONS, said: 'Transport tickets and fuel, along with often erratic computer game prices, drove up costs for consumers.

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Around the United Kingdom this was illustrated with Scotland (up 4.8%), Wales (up 4.3%) and Northern Ireland (up 4.4% over Q2) outperforming the national average.

Annual house price rates of change, 2006 to June 2018.

"These figures show that the cost of living squeeze is not yet a thing of the past", said Tej Parikh, an economist at the Institute of Directors, an employers group, noting high oil prices and a rise in utility bills.

Semi-detached properties, in demand by families, enjoyed the largest increase with a 4.4% in the month of June, rising to £216,000. Inflation numbers from July 2017 till June 2018 had adverse base effect due to GST... which had led to inflation increasing at a faster pace.

Alan Collett, fund manager at TM home investor fund, comments: "Whilst the current political uncertainty creates a somewhat subdued market in terms of transactions and valuations, as the ONS House Price Index data suggests, regional variations in house price growth continue to create opportunities for buyers".

The average price in Northern Ireland was £133,000, marking an increase of 4.4% over the year.

The dwindling and slowing house increases could highlight the beginning of a stagnant and struggling time for house sales.

While it is taking buyers longer to complete on their homes from 16 weeks past year to 18 weeks on average. "While the Bank of England's recent interest rate rise adds further pressure to household finances, we don't expect the cost of borrowing to alter significantly".

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