The pace of annual house price growth slowed to 7.1% in August, according to the latest Halifax House Price Index.

Halifax reported that house price inflation in August had hit a five-month low of 7.1% having fallen from 7.6% in July.

Average house prices still climbed on a monthly basis in August having seen a 0.7% increase, as well as a quarterly rise of 1.2%.

The latest data from Halifax means the average UK property price has now reached its highest level on record to sit at £262,954.

Halifax managing director, Russell Galley, noted that August’s rise was “relatively modest” given the rapid gains recorded across the housing market over the past 12 months, but also highlighted that prices remain £23,600 (9.9%) higher than June 2020, when the market began to reopen after the first lockdown.

“Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago,” Galley said. “However, while such government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation.

“We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home working. These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break comes to an end later this month.”

The Halifax index also suggested the macroeconomic environment is becoming “increasingly positive”, with job vacancies at a record high and confidence among consumers returning to pre-pandemic levels.

“Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term,” Galley added.

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