House prices dipped 0.2 per cent last month but remain 0.7 per cent higher than three months ago and a full 6.9 per cent more than this time last year.
The data – from the Halifax – suggests a clear slowdown in the market according to Martin Ellis, the bank’s housing economist.
“House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase. There are also signs of a softening in sales activity” he says.
“Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.”
The August dip was the smallest of the four monthly falls recorded by the Halifax so far this year, despite its timing at the height of summer and coming soon after the EU referendum result.
The bank says the quarter on quarter change is a more reliable indicator of the underlying trend. However, it also points out that the quarterly rate of increase has been on a downward trend over the past six months since peaking at 3.0 per cent in February.
A typical home in the UK now costs £213,930 says the bank.