Average house prices rose by 2% to £272,000 in the year to June, according to the latest official figures.

The annual growth rate slowed from 3% in May, marking the second consecutive month in which house price inflation has fallen.

Average prices rose by just 0.1% between May and June, compared with a 1% monthly increase over the same period last year.

The figures show that annual growth has been affected by comparisons with May and June 2025, when prices rebounded following a sharp fall in April that coincided with changes to stamp duty land tax in England and Northern Ireland.

In England, the average house price increased by 1.8% year-on-year to £293,000, while Wales recorded the same rate of growth, taking the average to £213,000. Prices in Scotland rose by 2.3% to £195,000.

The North West recorded the strongest annual house price growth of any English region at 4.7%, although this was down from 5.6% in May.

London remained the weakest-performing region, with average house prices falling by 2.5% in the year to June. However, the decline eased from 3.1% in May.

June marked the tenth consecutive month of annual house price falls in the capital, driven primarily by declining prices in Inner London.

Quilter financial planner Ian Futcher says: “Some of the slowing growth [in average UK prices] was mechanical due to the nature of stamp duty changes in April last year, but nonetheless, today’s figures offer a snapshot of where the market stood several months ago.

“Since June, mortgage market conditions have shifted, with lenders competing more aggressively for business and mortgage pricing improving for many borrowers.

“Transaction levels have also remained relatively resilient, suggesting there is still demand from buyers despite a challenging economic backdrop.

“The outlook has become more complicated, though.

“The market remains at the mercy of events far outside of the housing sector.

“The fallout of the conflict in the Middle East pushed the energy price cap up by 13% in July, resulting in today’s data showing inflation has jumped to almost 3%.

“This is likely to reinforce the Bank of England’s cautious approach to interest rates, and means a rise is not out of the question.

“While competition between lenders has helped bring down some mortgage rates, hopes of a more significant fall in borrowing costs in the near term have been dashed, meaning affordability will remain a significant hurdle for many households.”

Atom chief commercial officer Chris Storey says “Today’s ONS figures paint a picture of a cautious housing market, with annual house price growth continuing to slow.

“Would-be buyers have seen the impact of global events on mortgage rates, and their own monthly outgoings, and so have been more wary about pursuing transactions.

“Rightmove has just reported the biggest drop in August asking prices since 2018, while the number of homes available has hit a 12-year high.

“Combined with research noting that homes are taking longer to sell, it seems clear that activity is being driven by only the most motivated parties.”