UK house prices increased by an average of 2.2% to £290,000 in August, down from 2.7% growth in the 12 months to June, the latest ONS data revealed yesterday.

The figures also show that the average private rent edged up to a near-record rate of £1,286 per month.

Average residential property prices rose by 1.6% in England to £306,000, 2% to £218,000 in Wales and 6% to £199,000 in Scotland.

In Northern Ireland, the average house price was £185,000 between April and June, which was 6.4 per cent higher than a year ago, the ONS said.

In London, average property prices fell by 0.4%.

The North East was the English region with the highest house price inflation in the 12 months to July, at 3.8%.

Industry reactions:

Jeremy Leaf, north London estate agent, said: “The market is baring its teeth once more, demonstrating considerable resilience as these figures, unlike others, reflect cash and mortgage transactions in the build-up to the election when we would have expected economic worries to have compromised prices.

“Since then, falling mortgage rates, steadier inflation and more political certainty have helped to release pent-up demand and supply.

“Looking forward, we do not anticipate prices will pick up sharply as the improved choice and concerns, particularly among higher-end buyers and sellers, mean caution is prevailing.”

Iain McKenzie, CEO of The Guild of Property Professionals, said: “Another month of positive annual growth tempered by a modest fall in month-on-month figures will receive a mixed reception among estate agents and home sellers.

“Affordability concerns and a shortage of housing in some areas of the country are still an obstacle for prospective buyers, but the sense of stability we are seeing is good news for sellers and is allowing lenders to be more generous with mortgage offers.

“It still looks likely that house prices will remain stable for the rest of the year, though it won’t be until the Budget that we get an idea of how they will shape up for 2025.

“We would like to see some incentives to buy in the Budget. Alternatively, a clear strategy for building new homes and spelling out what they are going to do to support young first-time buyers struggling to save for a deposit.

“The property industry is at a crossroads and the next few months will be critical. If government decision-making is strategic and practical, any signs of volatility would be appeased.”

Nathan Emerson, CEO at Propertymark, commented: “It is reassuring to see further progress within the housing market as we continue to witness a consistent trend of growth as the year plays out. Overall, 2024 has proven to be transformative for the housing market with it facing a myriad of challenges at the start of the year and gathering pace to a far more upbeat performance as demonstrated by these latest figures.

“Propertymark remains keen to see the UK government kick start their house building programme to alleviate current pressures on housing demand and there is also a massive interest from those who aspire to buy to see and understand what support may be offered to boost their ability to get a footing on the housing ladder.”

Nicky Stevenson, managing director at Fine & Country, said: “The economy may have flatlined in July, but the property market is showing resilience in the face of ongoing challenges and is still showing healthy levels of annual growth.”

Lomond CEO, Ed Phillips, commented: “The property market continues to show strong signs of improvement and we’ve now seen six consecutive months of positive house price growth materialise over the course of the year, as well as the fifth consecutive of annual growth.

“Whilst interest rates remain far higher than today’s homebuyers have become accustomed to, the first base rate reduction in over four years has only helped to boost buyer confidence and this is likely to continue with yet further cuts anticipated before the year is out.”

The CEO of Yopa, Verona Frankish, added: “The UK property market has built up a real head of steam so far this year we’re now seeing consistent levels of monthly and annual house price growth, which demonstrates that buyers are not only returning to the market, but they are doing so with greater confidence.

“It’s also important to note that these latest figures are for July and so the boost to market sentiment that has come following August’s interest rate reduction is yet to be reported.

“With another base rate reduction widely expected to materialise tomorrow, the outlook is very positive indeed and we expected 2024 to be a far more positive year compared, as a result.”