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UK house prices are not as strong as previously thought.

Prices in the UK housing market rose by less than expected in the year to January, gaining 6.2 per cent against predictions of a 6.4 per cent rise.

The rise in house prices in the year to December was revised significantly downwards, from an initial estimate of a 7.2 per cent gain to just 5.7 per cent, according to official figures from the Office for National Statistics.

The revision meant that house prices did not accelerate at the end of 2016 as previously thought, with prices in the year to November rising 6.1 per cent.

The average UK house price was £218,000 in January 2017, according to the ONS, £13,000 higher than in January 2016 and £1,000 higher on average than in December.

London, unsurprisingly, had the highest average house price at £491,000, with the lowest average price in the North East at £124,000.

Analysts have warned that higher inflation is likely to lead to a squeeze on household consumer spending, which could slow house price growth this year.

A recent report from S&P predicted that house price growth in the UK would slow to just 2 per cent this year after gains of 7.5 per cent in 2016.

Copyright The Financial Times Limited 2017. All rights reserved.
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