Annual house price growth slowed to 11.5% in August, down from 11.8% in July, according to the latest Halifax House Price Index.

On a monthly basis, however, house prices climbed by 0.4% in August, reversing the 0.1% fall recorded by Halifax in July.

The figures have taken the typical house price to another record high in August, to stand at £294,260, the seventh record high out of the eight months so far in 2022.

According to the Halifax data, London has continued to lag behind other nations and regions although the rate of annual house price inflation in the capital now stands at 8.8%, its highest level in over six years. With a typical property costing a record £554,718, London’s average house price has risen by £44,669 over the last 12 months.

Wales remained the region at the top of the table for annual house price inflation in the UK, where it was up by 16.1% in August, the strongest level of growth since early 2005. This means average prices have risen by £31,246 over the last year, with an average Welsh property now costing £224,858.

Director, Halifax Mortgages, Kim Kinnaird, commented: “While house prices have so far proved to be resilient in the face of growing economic uncertainty, industry surveys point towards cooling expectations across the majority of UK regions, as buyer demand eases, and other forward-looking indicators also imply a likely slowdown in market activity.

“Firstly, there is the considerable hit to people’s incomes from the cost of living squeeze. The 80% rise in the energy price cap for October will put more pressure on household finances, as will the further increases expected for January and April. At the levels being predicted, this is likely to constrain the amounts that prospective homebuyers can afford to borrow, on top of the adverse impact of higher energy prices on the wider economy.

“While government policy intervention may counter some of these impacts, borrowing costs are also likely to continue to rise, as the Bank of England is widely expected to continue raising interest rates into next year.

“With house price to income affordability ratios already historically high, a more challenging period for house prices should be expected. However, this should be viewed in the context of the exceptional growth witnessed in recent years, with average house prices having increased by more than £30,000 over the last 12 months alone.”

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