House prices rose across the UK in July as the market shrugged off uncertainty over Brexit. However, the rate of growth in London is slower than every other region of the country. It is the first time this has happened since May 2009.
The Office for National Statistics said that house prices grew 1.1pc between June and July, and the annual rate of growth was 5.1pc, the same as last month. It has made a healthy recovery, after slumping to 3.8pc in March, which is being driven by areas beyond the capital.
London's rate of growth was 2.8pc in the 12 months to July, and is being outpaced by every other region in the UK as affordability in the capital is crunched.
Growth rates in the East and West Midlands and the South West all soared, thanks to huge demand and room for prices to grow. The highest rate of growth in the country was in the Cotswolds, where house prices have soared 16.2pc in the 12 months to July.
Samuel Tombs of Pantheon Macroeconomics questioned the official number: "Growth in the official measure of house prices is much stronger than other indicators, making us suspicious of the former’s accuracy. According to the Nationwide, Halifax and LSL/Acadata, house prices were up just 2.9pc, 2.5pc and 2.9pc year-over-year respectively.
"In theory, the official measure of prices should be the best barometer because it is based on all housing transactions, regardless of the purchase method or whether the property is new or old. But the official data often are revised substantially, as only a small sample of properties—especially for new build houses—are available for the most recent month."
Thomas Fisher, an economist at PwC, said: “Factoring in continued pressure on household incomes in the second half of the year, we anticipate a likely weakening in UK house price inflation to around 4pc on average for 2017.”
It came as UK Finance said lending for house purchases in July was lower than in June but higher than a year earlier. First-time buyers borrowed £5bn, which was 15pc lower than the previous month but up 14pc on last year, and homemovers' were lent 9pc less than in June but 15pc more than last July.
Remortgaging reached its highest level since January, and over the last year, this level has been at its highest since 2009.