UK annual house price growth increased by 2.2% in June, following growth of 1.7% in May, Nationwide has revealed.

The building society’s house price index found that the average house price in the UK stood at £277,484 last month, marking no month-on-month change.

Nationwide said it is "not surprising" that the market has softened in recent months, given the uncertainty caused by developments in the Middle East and the respective rise in energy prices and market interest rates.

The society’s chief economist, Robert Gardner, stated: "Indeed, consumer confidence and measures of housing sentiment have weakened, and mortgage approvals fell noticeably in May.

"While geopolitical tensions remain high, the signing of a memorandum of understanding between Iran and the US helped push oil prices back towards the levels prevailing before the conflict began.

"If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated - a view reinforced by the fact that UK inflation has also been lower than expected in recent months."

In Q2, Northern Ireland continued to be the region with the strongest annual house price growth, increasing by 8.6% in this period, although this is a drop from an increase of 9.5% in the same period last year.

House prices in Scotland (£195,928) and Wales (£220,337) increased by 3.5% respectively in this period.

The North West was the English region with the strongest growth, increasing by 3.9% in Q2 to £231,415, with prices in London rising by 1.6% to £540,903.

CEO at Propertymark, Nathan Emerson, said that this growth in house prices demonstrates that there is a "healthy level of demand" in the UK, despite ongoing affordability pressures.

He concluded: "However, national house price trends only tell part of the story, with Propertymark member agents continuing to report significant regional variations depending on local supply and buyer demand.

"Sellers should be encouraged by rising values, but realistic pricing remains crucial. Homes that are marketed at the right price continue to generate the strongest interest, whereas overpricing can quickly reduce momentum. A balanced market, supported by greater housing supply, remains the best outcome for both buyers and sellers."

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