UK house price growth slows in February, misses expectations

Average house prices in the UK rose 5.8% in the year to February, up from 5.3% in the year to January but still below the average annual growth of 7.3% in 2016.

Economists had been expecting a 6.1% jump in house prices.

Data from the Office for National Statistics showed the average house price was £218,000, up £12,000 from the same month last year and £2,000 higher than in January.

Prices in England saw the biggest increase, up 6.3% over the year to February, with the average price now standing at £234,000.

In Wales, house prices were up 1.8% over the last 12 months to £145,000, while the average price in Scotland rose by 3.1% to £139,000. In Northern Ireland, house prices were up 5.7% to £125,000.

London continued to be the region with the highest average house price, at £475,000, followed by the South East and the East of England, at £312,000 and £282,000, respectively. The lowest prices were seen in the North East, with the average there at £124,000.

The East of England showed the highest annual growth, with prices up 10.3% in the year to February, while growth in the East Midlands was second highest at 7.5%.

Howard Archer, chief UK and European economist at IHS Markit, said: "Despite the firmer ONS house price data for February, we expect the housing market to be increasingly affected by the deepening squeeze on consumers and their concerns over the outlook.

"Markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios are likely to weigh down on housing market activity and house prices. However, a shortage of supply is likely to put a floor under prices. Consequently, we believe house price gains over 2017 will be limited to no more than 2.5% - and there is a very real possibility that it could come in lower than that."