London house prices fall at fastest rate in 10 years

London house prices fall at fastest rate in 10 years”

The ONS said motor fuels, accommodation services and electricity, gas and other fuels saw average prices shrink, but these were offset by price rises in clothing and food between May and June. Stripping out housing costs, CPI was 2%, also unchanged on May and in line with the Bank of England's inflation target. It is the lowest annual rate for the capital since August 2009, when it was -7.0%.

If we look at the details of today's price data from the ONS we see that the month-on-month inflation rate stood at 0% in June, down on the previous month's 0.3% growth.

House prices in the a whole rose 1.2% on the year in May, the ONS said, down from 1.5% in April and 3.1% in May last year.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "Looking ahead, CPI inflation likely will fall a bit below the 2% target in the second half of this year as energy's contribution continues to decline".

ONS head of inflation Mike Hardie, said: "Annual house price growth remained slow but was once again strong in the North West and Wales".

"At 2%, it remains very muted, despite the unprecedented fall in the value of sterling since the vote to leave the European Union, which in normal times should have led to higher import prices".

The slowdown in London has failed to significantly bring down prices in the capital, which are still up on a decade ago and the most expensive in the UK. A lot of people took the news with a pinch of salt pointing to the ever increasing prices of commodities.

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Jonathan Harris, director of mortgage broker Anderson Harris, said: "House price growth is slowing as sentiment continues to weaken, partly as a result of Brexit uncertainty".

Data released on Tuesday showed that the United Kingdom unemployment rate remained at its lowest level since 1974, at 3.8%.

The ONS said: "Over the past three years there has been a general slowdown in United Kingdom house price growth, driven mainly by a slowdown in the south and east of England".

"Plus, the housing market is still showing sturdier than expected signs of resilience amid political uncertainty".

The Bank of England has increasingly signalled that it may cut interest rates, with a member of the bank's rate-setting committee saying last week that he would vote to reduce the bank's benchmark 0.75% rate to near-zero levels in the event of a no-deal Brexit.

Marc von Grundherr, director of lettings and estate agent Benham and Reeves, said: "Although price growth may remain muted, these "slower" markets are still home to the highest property prices in the United Kingdom".

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