Property prices in the UK increased on average by 0.2% month on month in August and were up 3.2% year on year to £232,797, according to the latest official data to be published.
A breakdown of the figures from the Land Registry shows that in England prices increased by 0.2% month on month and by 2.9% on an annual basis to an average £249,748.
The East Midlands recorded the highest monthly price rise at 1.5% while the East of England saw the most significant monthly price fall, down by 1.1%.
In London prices fell by 0.5% in August compared with July and house prices have fallen by 0.2% year on year, taking the average property value to £486,304.
The market is stronger in both Scotland and Wales. In Scotland average property prices increased by 0.3% month on month and by 4.1% year on year to £145,309 with prices up in 28 out of 32 local authority areas since August 2017.
The biggest price increase was in West Dunbartonshire, up year on year by 11.9% to £111,000. The largest decrease was recorded in Aberdeen where average prices fell over the year by 4% to £161,000.
In Wales prices increased by 1.9% month on month and by 6.2% year on year to an average of £162,374. Overall prices increased in 19 out of 22 local authority areas in the 12 month to August 2018.
Terraced houses showed the biggest increase, up by 7.2% year on year to an average of £127,000. The average price of flats and maisonettes increased by 4.6% to £117,000 year on year, the lowest increase of all property types in Wales.
Monmouthshire and Newport showed the strongest growth, increasing by 14% to an average of £272,000 and 13.7% to £181,000, respectively.
According to Richard Snook, senior economist at PwC, the data is consistent with the projections in its recent UK Economic Outlook report where national house price growth of around 3% was forecast for 2018.
‘We expect this to continue in the medium term to 2025. This implies the average UK house price could rise from £221,000 in 2017 to around £285,000 by 2025,’ he pointed out.
He believes that the London market is being affected by Brexit uncertainty and has been flat due to leaving the European Union affecting the confidence of both buyers and sellers. The firm predicts price falls in London in 2018 and 2019 of 1.7% and 0.2% respectively.
According to Dilpreet Bhagrath, mortgage adviser at Trussle, subdued economic activity and ongoing pressure on household budgets is putting people off moving, so there is less demand from new buyers while other are hesitant due to the Brexit negotiations.
‘Many home owners will be concerned about seeing equity they’ve built up over the years eroded by falling house prices, however a fall in house prices isn’t necessarily long term. In the meantime, first time buyers are slowly seeing their perspectives rise. Not only are house prices slowing, but the average two year fixed rate mortgage has fallen for the first time in 12 months, despite two base rate rises, helping to ease the cost for borrowers,’ she explained.