House price inflation in England and Wales rose just 0.1% in October, markedly below the 0.7% average over the past twelve months, and the smallest increase since December 2005. The average house price is now £184,346 in England and Wales, and £351,039 in London.
In October, according to the report from the Land Registry, London inflation fell by 0.6%, although it remains the region with the highest annual price change (14.7%). The region with the lowest annual price rise is the North East, at 5.7%.
Some commentators who see trends in London as an insight into what the rest of the country can expect see this as a warning sign, but economists at Capital Economics remain reasonably confident that we are not in for great falls: ‘In truth, it is too early to say whether the weakness in London house prices is the start of a new trend or simply volatility,’ said Ed Stansfield at Capital Economics.
‘But it does seem consistent with a range of reports that the uncertainty generated by financial market problems has significantly dented confidence in the capital’s housing market,’ he continued.