Annual house price growth slowed to 13.6% in the year to August, down from 16.0% in July, according to the latest UK House Price Index published by the Office for National Statistics (ONS).

This is despite house prices increasing on a monthly basis between July and August, by 0.9%, due to the sharp rise in house prices in August last year following changes to the government’s stamp duty holiday.

It means the average UK house price stood at £296,000 in August, a figure £36,000 higher than in August 2021.

Fluctuations in housing market growth have been driven by the volatility caused by stamp duty holiday changes throughout 2021. Tax holiday changes at the end of June 2021 caused average house prices to fall £13,000 in the month to July 2021, followed by an increase of £7,000 into August 2021, for example.

The latest ONS data has shown there was a smaller increase of £3,000 between July and August 2022. This base effect, where prices are increasing by a smaller amount than the same period last year, has led to the slowing of annual growth this month. Trends in 2022 have been “more stable”, the ONS stated.

“Today’s data confirms that house price growth remained resilient over the summer,” commented technical Director at Legal & General Surveying Services, Malcolm Webb.

“However, it may be some time until we have the data to analyse the volatility felt by the UK housing market in the last few weeks. The fast-moving nature of today’s market also makes it extremely challenging to forecast which way house prices will go next.

“Many prospective homeowners will be feeling anxious about their finances, which makes a thorough survey more important than ever to avoid unexpected repair costs further down the line.”

Proposition director at PRIMIS, Vikki Jefferies, added: “Despite a cooling in the rate of house price growth reflected in today’s statistics, prices remain strong and the housing market continues to prove itself resilient. It’s also positive to see the new Chancellor has reconfirmed the stamp duty cut first announced in September. This is particularly the case for first-time buyers who will see their threshold on stamp duty exemption rise to £425,000 as a result.

“Overall demand for properties remains healthy and the mortgage market remains a flurry of activity, with many buyers continuing to rush to lock in rates. In this ever-evolving mortgage landscape, brokers have a vital role to play in ensuring their customers understand new developments, as well as what the best products available to them are, in light of these.”

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