Average property prices inched up just 0.3% last month to stand at £217,663, Nationwide has reported.

Chief economic Robert Gardner said: “Annual house price growth remained below 1% for the eighth month in a row in July, at 0.3%.

“While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.

“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued.

“Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.”

Gardner said that people are moving far less often than they used to, with the number of properties now changing hands equating to around 5% of the total number of homes in the UK.

He said this was less than half the level of 2007, and that shortage of properties on the market was likely to be a factor.

He said: “This has led to a less liquid market, which may be deterring some potential home movers from trying to sell their own properties – a trend which becomes self-reinforcing.

“A possible consequence of the low rate of churn is that the housing stock is not being utilised as effectively as it could be.

“Indeed, a noticeable trend over the past decade is the steady increase in the proportion of ‘under occupied’ properties, defined as those with two or more spare bedrooms.

“The latest data indicate that over half of owner-occupied properties (54%) are now under-occupied, compared with just 15% in the private rental sector.”

A separate report from estate agency chain haart tallies closely with Nationwide’s, saying that house prices in June at SSTC stage averaged £218,433.

However unlike Nationwide, haart says this was a price drop, not a price rise – down 0.3% on May, and down 2.8% since June last year, according to its own records.