House prices in the UK grew 5.6 per cent in the year to March 2014, despite a monthly fall of 0.4 per cent.
Average house prices in England and Wales now stand at £169,124, still considerably lower than the November 2007 peak of £181,618, the Land Registry House Price Index found.
As could have been predicted, London saw the fastest increase in property values, up 12.4 per cent.
The only annual price decrease was seen in Wales, where houses cost 1.6 per cent less this March than last.
Commenting on the figures, David Brown, commercial director of LSL Property Services, said: “Price rises may have slowed slightly, but this isn’t a backwards step for the market. Year-on-year house price growth remains strong and buyer sentiment is high. In terms of volumes, the UK property market continues to show significant and sustained growth.
“Numbers matter as much as prices. Providing homes is a vital service for our economy, and the first function of the property industry. Alongside such a pick-up in transaction volumes, marginally slower price rises will benefit aspiring homeowners looking to get on the ladder.
“The rental market is already leading the way on affordability, and the next big step will be for wages to grow in tandem with house prices too. For that to happen we need to build considerably more homes, and the economy to maintain its current trajectory – but things are going in the right direction.”
Danny Waters, CEO of specialist mortgage broker, Enterprise Finance, said: “The demand for property in the South East reflects the influx of Londoners who are cashing in and moving out. There has never been a better time to relocate out of the capital.
“Despite the slight drop-off in March, the property market overall is still gaining momentum.
“This week’s GDP figure, an improving jobs market and falling inflation generally will add to the feel-good factor. People feel more optimistic and property prices are rising as a result.
“How the Mortgage Market Review truly affects the market remains to be seen although we would expect to see some impact on house prices in the months ahead.
“The market is now considerably more fluid than a year ago, as the rising number of transactions shows.
“As a global city and unrivalled safe haven for overseas investors, London prices will remain high and will always be in the limelight.
“In recent months there has been a slight cooling of values at the super prime end of the London market. However, I expect prices in prime areas of the capital to continue to grow.
“As ever, people need to purchase with a cool mind. Buyers in London and the South East must now be very vigilant.”
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