London bucks house price trend

The annual growth rate revealed yesterday by the Office for National Statistics (ONS) was slower than the 2.3 per cent recorded in both May and June, with the average price across the UK standing at £234,000.

England recorded a 2.4 per cent annual increase, taking typical prices to £242,000, while Scotland saw a 1.1 per cent drop, pushing average prices to £183,000, and prices in Wales fell by 0.2 per cent to reach £159,000.

Northern Ireland recorded a 10.9 per cent year-on-year drop to an average £130,000, continuing a trend of sharp decreases which analysts have put down to prices re-adjusting after they soared before the financial crisis struck.

Mostly the growth was concentrated in the South East. The ONS said that if London and the South East were stripped out of the figures, UK prices would have only risen by 0.6 per cent in the 12 months to July.

Prices rose by 5.7 per cent in London year-on-year to reach £397,000 on average, while the North East, which saw a 0.5 per cent annual decline, had the lowest average house price of the English regions at £145,000.

Analysts have predicted prices will continue to fall for the rest of the year because of the weak economy.