A record high in average UK house prices of £227,000 was recorded for the year to April, a rise of 3.9% according to new figures from the Office for National Statistics (ONS).
Annual property inflation of 1% was recorded in London, with a surprise 2.4% in house prices recorded in the capital.
The high average cost of a home in London of £485,000 could be deterring buyers as the capital registered the lowest growth of all regions nationally.
London flats and maisonettes have grown by 1% in the year for a new average cost of £202,052.
Semi detached homes increased by the most in London at 5.3%, with terraced homes (4.7%) and detached homes (3.8%) also seeing rises.
The recent decision of the Bank of England's Monetary Policy Committee to hold rates at 0.5% has helped to keep mortgages relatively affordable.
Jeremy Leaf, an estate agent says that:
"Behind the numbers bears out what we’re finding on the High Street – transactions are falling while listings have increased but not making up for an historic shortfall whereas demand is relatively flat.
As a result, the increase in house prices is more to do with the lack of supply of appropriate property in places where people most want to live rather than a marked improvement in confidence."
Mike Scott of Yopa said:
"Over the next few months, it is likely that prices will continue to rise, but with the annual rate of growth falling closer to 2 per cent than 4 per cent.
London is also likely to fall further behind, perhaps turning negative as has already happened in other reports that use more recent data."
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