The annual rate of UK house price growth slowed to 0.6% in the year to July, down from 1.9% in the 12 months to June.

According to the latest UK House Price Index published by the Office for National Statistics (ONS), which revised its figure for June to 1.9%, the average UK house price was £290,000 in July.

This is an estimated £2,000 higher than it was 12 months earlier, but £2,000 down on the recent peak recorded in November 2022.

Average house prices increased over the year to July to £309,000 in England (0.6%), and to £192,000 in Scotland (0.1%). Average house prices in Wales, however, decreased to £216,000 (-0.1%).

In Northern Ireland, the ONS data showed that average house prices increased by 2.7% to £174,000 in the year to Q2.

The ONS also reported that the North East saw the highest annual percentage change of all English regions in the 12 months to July (2.7%), while the South West saw the lowest (-1.0%).

Managing director at more2life, Ben Waugh, commented: “As the ongoing cost of living crisis squeezes borrower incomes, it’s not hugely surprising that activity in the mortgage market is slowing down.

“The UK housing market is resilient enough to stay the course in choppy waters, but the consecutive increases in the base rate have created a downward pressure on prices, although they are higher than this time last year.”

Head of mortgages at Atom bank, Richard Harrison, added: “Most commentators expect prices to remain suppressed over the short-term, but do not expect to see double digit falls on the basis that employment levels perform as expected.

“Looking more positively at the situation, moderately lower house prices coupled with on-going growth in wages could improve affordability for prospective buyers. In addition, mortgage pricing has been falling during September and could continue with inflation dropping faster than expected. That being said, borrowers should still get used to higher rates, with the base rate expected to remain higher for longer.”

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