Annual house price growth dropped to 1.7 per cent in January, according to the latest house price index from the Office for National Statistics.
This is down from 2.2 per cent in December and is the lowest rate of annual growth since June 2013 when it stood at 1.5 per cent.
As a result, the average house price now stands at £228,000, up by £4,000 from a year ago.
The capital saw the worst house price changes, with average prices in London falling by 1.6 per cent over the year to January.
The East of England followed with falls of 0.2 per cent over the year.
By contrast Northern Ireland saw prices jump 5.5 per cent, with Wales seeing rises of 4.4%, which the ONS ascribed to the abolition of the Severn Bridge tolls.
It’s not all down to Brexit
Jeff Knight, marketing director at Foundation Home Loans, said that hesitation was certainly taking over with buyers, but argued that it would be wrong to put all of the blame for the market’s troubles on Brexit.
“The fact is that lack of supply will continue to inflate prices beyond the reach of first-time buyers and we shouldn’t lose sight of this,” he added.
However, Sam Mitchell, chief executive of online estate agent Housesimple, suggested that a lengthy Brexit delay might actually lead to an activity spike, as buyers and sellers who have been holding off decide they’ve had enough of waiting.
He added: “This response to Brexit is already playing out in some regions. We have seen healthy transaction levels in the North West and Yorkshire over the past couple of months, with little evidence that buyers or sellers are sitting on their hands.
Mitchell also suggested that if you ignore the “Brexit noise” the fundamentals of the market are still strong, with “low unemployment, strong wage growth, low interest rates and an abundance of competitive mortgage deals on offer”.
Gloomy figures reflect reality
Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors, noted that these “much gloomier” figures followed the encouragement of last month’s index from the ONS, and argued this was why it was dangerous to read too much into a single 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,” he continued.
“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.”