LONDON (Reuters) – British house prices rose at the weakest rate in six-and-a-half years in February, dragged down by London’s biggest price slump in a decade as Brexit uncertainty sent chills through the property market.
FILE PHOTO: Houses are seen in London, Britain January 19, 2017. REUTERS/Stefan Wermuth
Official data also showed Britain’s consumer price inflation unexpectedly held just below the Bank of England’s 2 percent target in March, offering relief to consumers whose spending has helped Britain’s economy through the Brexit crisis.
House prices were just 0.6 percent higher in February than a year ago, slowing sharply from a 1.7 percent annual rise in January, the Office for National Statistics (ONS) said.
In London, house prices were down by 3.8 percent — the biggest drop since mid-2009. The malaise in the capital spread to the south-east of England, where prices fell for the first time since 2011.
Other surveys have shown Brexit to be a major drag on the property market in the capital, which is sensitive to flows of migrant workers from the European Union. A surge in prices in London in previous years has also stretched affordability.
House prices in London are now 6 percent below their mid-2017 peak, albeit a smaller contraction than an 18 percent decline during the financial crisis.
“It is possible that the avoidance of a ‘no deal’ Brexit at the end of March could provide a modest boost to the housing mar