The average UK house price increased by 8.3% in the 12 months to June, according to the latest Zoopla House Price Index.

Zoopla is expecting demand for homes to weaken later in the year, but the property expert has revised up its forecasts for house price growth and sales volumes for 2022.

Around the country, Zoopla’s data has revealed that prices are rising fastest in Wales at 11.1%, and remain in double digits in the South West and East Midlands. London continues to lag behind with average prices climbing by a more modest 4% over the last year.

The rate of house price increases still remains ahead of the five-year average, and while Zoopla stated that it is expecting the rate of growth to slow over the second half of the year, this is not forecast to be as fast as it had projected at the end of last year, due to the “continued resilience in sales and buyer interest”.

Zoopla research director, Richard Donnell, said: “A lack of any major overvaluation of UK housing – thanks to mortgage regulation – means the market is in much better shape to weather the economic challenges ahead than in previous economic cycles, but it's not immune.”

According to the most recent data, demand for homes remains 25% above the average over the last five years. Zoopla’s index stated that buyer interest has slowed over recent months from high levels registered in the spring, although levels of demand remain on a par with this time last year.

However, the property expert has also warned that the headwinds facing consumers will be starting to “squeeze some people out of the market”.

Responding to Zoopla’s latest research, senior pensions and retirement analyst at Hargreaves Lansdown, Helen Morrissey, added: “Our love of property remains undimmed even in the face of a cost of living crisis that has given our finances a pounding in recent months. Demand remains high with Zoopla amending its forecast upwards on the number of sales expected by the end of the year.

“The impact of the pandemic continues to be felt as the shift to flexible working makes people reconsider their living arrangements and maybe make the move to somewhere a bit further afield that is more affordable. The increase in people choosing to retire as a result of the pandemic is also fuelling activity and house prices growth remains well supported for the time being.

“With more rate rises on the horizon it is likely people will start to consider whether now is the right time to move, especially as rising bills take large chunks out of our disposable income as we approach winter. The prospect of paying higher mortgage costs will probably be a step too far for many people which will dampen demand and house price growth towards the end of the year and the beginning of 2023.

“Despite the outlook for weaker growth going forward, a full-blown housing market crash looks very unlikely. Instead, the outlook is for a continued slowdown in the market.”

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