The rate of house price growth slowed in July, the latest official figures show.
The average year-on-year property price rise slipped from 3.6 per cent in June to 2.8 per cent in July, according to the Office for National Statistics.
It means that the typical home is £8,000 more expensive than this time last year.
The ONS data is based on sold prices, which will have been agreed by buyers and sellers in the months prior.
Much of the yearly growth is being driven by price rises in more affordable parts of the country.
In the North East, average house prices have risen 7.9 per cent in the 12 months to July to reach £163,684.
No demand: Buyers appear to be less keen on new builds and flats, particularly in more expensive parts of the country
Meanwhile, in the North West prices are up 4.8 per cent and in Yorkshire and the Humber they are up 3.9 per cent.
The opposite is true for more expensive parts of the country. Here prices have barely moved.
For instance, in London, prices are only up 0.7 per cent in the 12 months to July with the average home fetching £561,587 in the capital.
In the South East and South West of England, prices are up 1.2 per cent and 1.4 per cent respectively.
However, it’s worth pointing out that the monthly rate of house price growth, even in the more affordable regions, appears to have stopped dead in July.
Buying agent Jonathan Hopper, chief executive of Garrington Property Finders, said: ‘On an annual basis, prices in North East England are still growing 10 times faster than those in London, but in July both regions recorded the same rate of growth – zero.’
Houses continue to increase in price by more than flats, according to the ONS.
Detached and semi-detached houses are up 3.6 per cent while flats and maisonettes are only up 0.7 per cent, it said.
A growing number of flat owners are being forced to sell their homes for less than they paid for them, according to new figures from estate agent Hamptons shared exclusively with This is Money.
It showed that in 2025 to date, 22 per cent of flat sellers have sold for less than they bought for – more than double the rate seen across the wider market.
Separate figures from analytics firm Property Data showed that 24 per cent of flats sold in London between October 2024 and June this year were sold for less than they were bought for.
New build prices also appear to have taken a hit. In the year to May the average price paid for a new builds in England surged by 7.7 per cent, but in May it plunged by 3.9 per cent compared to April.
Hopper added: ‘Nowhere is the cooling sharper than with new build homes.
‘Such extreme month-on-month volatility reveals the patchy supply as developers build less, but also a growing wariness among buyers.
‘Buyers are increasingly questioning whether paying a premium for something brand new represents genuine value, and in a more value-driven market developers may face a struggle to achieve the prices they once commanded.’
Things are likely to get worse before they get better, according to the estate agent Knight Frank.
This week it downgraded its forecasts for house price growth saying the average house price will rise in price by 1 per cent this year, having predicted a 3.5 per cent rise just four months ago.
It said a combination of a high supply of homes on the market and faltering confidence meant it now expected slower house price growth this year and in 2026.
Tom Bill, head of UK residential research at Knight Frank, said: ‘Price growth is being pushed lower by higher supply and weaker demand.
‘Supply has been boosted by an overhang of property since April’s stamp duty cliff edge and the fact more landlords are selling due to the Renters Rights Bill.
‘Stable mortgage rates have supported demand but a general mood of economic uncertainty, which will become more intense as November’s Budget approaches, has made some buyers think twice and we have revised down our UK forecast this year.’
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