Although house prices are edging upwards, London is slipping back in the league table of UK growth.
For the first time in seven years the capital was outside the top three regions in the UK with the strongest price growth, according to a Nationwide survey.
House prices in the capital increased by 7.1% annually in the third quarter of 2016, slowing from a 9.9% rate of growth seen in the second quarter of this year.
The average house price in London is now £474,736, still making it by far the most expensive area of the UK. The average across the UK is £206,015 following an increase of 0.3% month on month and 5.3% year on year, Nationwide Building Society reported.
London’s feeder towns and commuter belt are more resilient with the strongest price growth of 9.6%. This includes places in West Kent, Slough, Reading and Luton.
Further afield, areas such as Brighton, Milton Keynes, Portsmouth and Southampton show the next strongest growth of 8% taking average values to £267,151.
East Anglia, with 7.3% pushed London out the top three. Nationwide said house prices in southern England were still “well above pre-crisis levels”.
Despite the traditional strength of the south east, the building society said there were “tentative signs” of an evening out of the north/south divide with annual price growth accelerating in the North West and Yorkshire.
Robert Gardner, Nationwide’s chief economist, said: “The number of new homes built in England has picked up, but is still not sufficient to keep up with the expected increase in the population.”
His remarks come as it was confirmed that the Government is to close the Help To Buy mortgage guarantee scheme, which was launched in 2013 to give buyers with only a small deposit saved a helping hand to buy a home.