Annual house price inflation slowed to 2.1% in June, according to the latest Nationwide House Price Index.

This was down from the 3.5% that Nationwide reported in May.

On a monthly basis, house price growth dipped by 0.8% in June compared to May, to leave the average UK house price standing at £271,619.

Nationwide suggested that the softening in price growth could have reflected “weaker demand” following the increase in stamp duty at the start of April.

“We still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive,” Nationwide’s chief economist, Robert Gardner, said.

“The unemployment rate remains low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little if bank rate is lowered further in the coming quarters as we and most other analysts expect.”

Chartered financial planner at Quilter Cheviot, Rosie Hooper, added that affordability remains a “huge hurdle” for many buyers.

“Many prospective buyers, particularly first-time purchasers, face tough affordability assessments and elevated upfront costs following the changes to stamp duty,” Hooper commented.

“While the market is still digesting the stamp duty reforms in April, they will soon become the norm, and their immediate impact will fade into the rear-view mirror. First-time buyers and movers alike are already beginning to adjust to the new thresholds, which should help stabilise activity over the coming months.”

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