The typical property price in Britain has fallen almost £4,000 in four months dragged down by London and the commuter belt.
Average home values have dropped from £232,116 in September 2018 to £228,147 in January 2019, data from the Office for National Statistics show.
London saw the biggest lull – prices fell 1.6 per cent over the year to January 2019, a further decrease from the 0.7 per cent recorded in December 2018.
This was followed by the East where prices fell 0.2 per cent, the first recorded fall in the region on an annual basis since October 2011.
London has seen a -1.6% change in the last 12 months with East Midlands seeing 4.4% rise
The ONS figures come after revised forecasts from the Office for Budget Responsibility.
Its five-year prediction is now for 17 per cent growth instead of 20 per cent and said: ‘Indicators of housing market activity and price expectations have deteriorated significantly since our October forecast and are consistent with a further fall in house price inflation.’
Concerns over Brexit and stretched affordability were blamed by property experts for the slowdown in house price growth.
Figures from Rightmove also revealed that Brexit was to blame for asking prices rising at their slowest pace in March for eight years.
It found the average price of property across the UK coming to market in March rose by just 0.4 per cent, or £1,287, to £302,002.
This makes it the lowest average monthly rise at this time of year since 2011 – considerably lower than the 0.9 per cent average over the last seven years.
Jeremy Leaf, North London estate agent and a former RICS residential chairman said: ‘After last month’s encouraging figures, this month’s UK HPI is much gloomier, showing once again it is dangerous to read too much into one set of numbers.
‘However, we are finding that mood reflected on the ground – a patchy market at best in some areas whereas in other, sometimes even those adjoining, there is more optimism.
‘This is borne out perhaps more in the numerous micro markets of London where local factors are often much more relevant than the national picture.’
Inflation edges up but remains below Bank of England target
Inflation rose in February but still remained below the Bank of England’s target, as food and alcohol price rises were offset by weaker growth in both clothing and footwear, according to new figures.
The Consumer Prices Index rose to 1.9 per cent, data from the ONS shows. This is despite economists expecting inflation to hold at 1.8 per cent after the January rate came in below the Bank of England’s 2 per cent target for the first time in two years.
CPI, including owner-occupiers’ housing costs, which is the ONS’ preferred measure of inflation, remained unchanged at 1.8 per cent in February.
Mike Hardie, head of inflation at the ONS, said: ‘The rate of inflation is stable, with a modest rise in food as well as alcohol and tobacco offset by clothing and footwear prices rising by less than they did a year ago.’
Food prices were up 0.4 per cent on the month, compared with 0.1 per cent last year whilst there was a 0.9 per cent increase on the month for alcohol and tobacco versus flat prices in February 2018.
Beer prices were up 0.6 per cent between January and February, compared to a decline of 1.1 per cent last year. Food and alcohol hit annual inflation of 1.1 per cent and 5.1 per cent, respectively.
However, clothing and footwear had a downward effect with the increase smaller in February than in the same period last year as clothing and footwear prices dropped 2 per cent annually.
Motorists saw lower fuel costs last month as petrol fell by 0.5p per litre on the month to 119.1p, whilst diesel also fell by 0.2p to 129.3p.
The Retail Prices Index, a separate measure of inflation, was 2.4 per cent, down from 2.5 per cent in January – the lowest percentage since October 2016 when it was 2.2 per cent.