STAGNANT house prices in London are acting as a brake on UK house price growth elsewhere, according to Landbay chief executive John Goodall (pictured).
The latest Office for National Statistics (ONS) house price index shows that UK house prices increased by 3.5 per cent in the year to September 2018, up from 3.1 per cent the previous month.
London saw the lowest annual price increase, down by 0.3 per cent, while the West Midlands experienced the greatest annual price rise, up by 6.1 per cent.
And buy-to-let (BTL) home purchase mortgages dropped by 18.8 per cent during September compared to a year earlier, according to figures released by trade body UK Finance on 13 November.
“Accelerating growth is being held back by falling property value in London, dragging down the rest of the country,” said Goodall.
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“Following years of steep price rises, affordability in the capital has become stretched.
“Combine this with the punitive changes to stamp duty and Brexit uncertainty, and it’s no wonder that would-be buyers and sellers are staying put.”
UK Finance’s figures showed a softening UK mortgage market with numbers down across the board.
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The number of first-time buyer mortgages dropped by 4.5 per cent during September while home-mover mortgages were down 8.4 per cent.
BTL remortgages fared better with a marginal drop of 0.8 per cent compared to September 2017.
“Regionally we are still seeing significant investment interest which confirms it’s not all doom and gloom,” said Jeff Knight, marketing director for Foundation Home Loans.
“On the BTL side, activity has been supported by rising tenant demand due to numbers of landlords preparing to sell up and avoid the new BTL taxation.
“Supporting prospective buyers and tenants as they navigate the market when people are unlikely to strike a deal until negotiations have come to an end is crucial.
“An increase in those needing specialist financial support is something lenders should have at the top of their agenda as we head into year end.”