Annual house price growth falls to five-year low

Falling growth has been driven mainly by a slowdown in the south and east of England.

The lowest annual growth in October was in London, where prices fell by 1.7% over the year.

House prices in England grew slower than other countries of the UK, increasing by 2.4% in the year to October 2018, down slightly from 2.6% in the year to September 2018.

At an English regional level, the North West showed the highest annual growth, with prices increasing by 4.9% in the year to October 2018, followed by Yorkshire and The Humber at 4.4%.

Jonathan Samuels, CEO of Octane Capital, said: “The million dollar question at present is whether the property market slowdown turns into a property market meltdown.

“With Brexit Day approaching, the hope is that strong employment levels, falling inflation, a lack of supply and continued low borrowing rates will prevent a collapse in prices.

“But against a backdrop of such extreme political uncertainty, there’s a genuine fear in some corners that 2019 could be 2009 all over again.

“London and the South East are the major drag on average prices, with the capital in particular paying for its over-exuberant growth several years ago. The irony is that in many other areas of the UK, where property is priced reasonably rather than extravagantly, demand is relatively robust and the picture altogether rosier.

“What happens in the months ahead could shape the fortunes of the property market in the years ahead.”

Mike Scott, chief property analyst at Yopa, commented: "This is more optimistic than other recent reports, because it uses older data. The house sales that completed in October will have been agreed and had their mortgages approved around June, when other reports were showing a similar year-on-year rate of growth.

"We therefore expect that the official index will see further falls in the next few months, with the annual rate of growth falling to around 1 per cent by the time of the February report, which will be published in April next year."