House prices increased at their slowest annual pace in nearly six years in January as property values tumbled in London but increased relatively strongly in areas including the Midlands, Wales and Northern Ireland.
Scotland and England saw a slowdown in annual house price growth, while in Wales and Northern Ireland property values are rising relatively strongly.
In Wales, the abolition of the Severn crossing tolls is helping to drive prices up in the south-east of the country, according to the report released jointly by the Office for National Statistics (ONS), Land Registry and other bodies.
Average house prices in the UK increased by 1.7 per cent in the year to January, down from 2.2 per cent in December and the lowest annual rate since June 2013 when it was 1.5 per cent, the report said.
UK house price growth has been slowing for the past two-and-a-half years.
In London, house prices fell by 1.6 per cent annually, while in the east of England prices dropped by 0.2 per cent over the year.
In the East Midlands, prices rose by 4.4 per cent in the year to January.
Across the UK, the average house price was £228,000 in January.
ONS head of inflation Mike Hardie said: “While average UK house prices increased over the year, the rate is down from last month and is at its lowest in almost six years.
“London property prices continued to fall, seeing their steepest drop since the end of the financial crisis.”
House prices in Scotland grew at a slower rate than other countries in the UK, increasing by 1.3 per cent in the year to January, down from 2 per cent in the year to December, taking the average house price in Scotland at £149,000 in January.
By contrast, house prices in Wales rose by 4.6 per cent annually in January, reaching £160,00 on average.
House prices in England increased by 1.5 per cent annually in January. The average house price in England was £245,000.
The report said: “This continues to be driven by strong house price growth in south-east Wales, likely linked to the abolition of the Severn Bridge tolls.”
In Northern Ireland, house prices increased by 5.5 per cent over the year, taking the average house price to £137,000.
Howard Archer, chief economic adviser at EY Item Club said: “Most recent data and surveys have pointed to muted housing market activity.”