The price of an average British home increased by just under 5% in the year to January 2018, according to official figures.
Although house prices dropped 0.3% between December 2017 and January 2018, a 4.9% rise was booked for the year.
That makes the average UK home price £225,641, according to data published by the Office of National Statistics.
The figures show six regions in England saw price drops and three price rises.
The biggest increase was 1.4% in the South West, while the largest fall was 5.5% in the North East.
In London, house prices rose by 1%, where average house price increased 2.1% year on year from £475,619 to £485,830.
In a separate report, online estate agency HouseSimple claims 585 one-bedroom flats are for sale in the capital with an asking price of at least £1 million. The most expensive is on the market in Knightsbridge for £4.95 million.
Buy to let rents stagnate
The ONS also published data about UK private rents.
The details show buy to let rents in many areas are stagnating.
The average UK rent rise for the year was 1.1% – ranging from a high of 1.4% in Wales to just 0.1% in London.
The rise equals that of January 2018 for the lowest recorded since the Index of Private Housing Rental Prices started in 2011.
“Growth in private rental prices paid by tenants in Great Britain has seen signs of a slowdown since the end of 2015,” says the report. “This slowdown in the growth in private rental prices in Great Britain is driven mainly by a slowdown in London over the same period.”
Regionally, the largest rent rise was 2.5% in the East Midlands – down from 2.6% in January. The South West and the East of England posted 2.1% increases.
The only region with a lower rent rise than the capital was the North East, which has had a zero rate for two months.
Landlords struggle with mortgages
Landlords say a tougher financial climate and new borrowing rules are making buy to let mortgages harder to get.
Seven out of 10 professional landlords – those with portfolios of four or more rental homes – say new rules introduced by the Bank of England in September have tightened the buy to let mortgage market and slowed the application process.
The research was announced by the National Landlords Association, whose CEO Richard Lambert explained: “These findings show that the changes seem to be greatly affecting the ability of landlords to find new finance and increase their portfolios.
“Given that the private rented sector now makes up 20% of the housing market, it is vital that professional landlords are incentivised to continue providing good quality affordable housing to those who need it. This appears to be achieving quite the reverse.”