The average house price was up just 0.1 per cent in July, compared to 1 per cent growth in June, according to the latest figures from Nationwide.
The building society’s house price index shows while July was the 15th month in a row that prices have risen, growth was at the slowest pace since April last year.
While annual price growth remains in double digits, it now sits at 10.6 per cent compared to 11.8 per cent in June.
Nationwide’s chief economist Robert Gardner says the slowdown was “not entirely unexpected”.
“Mortgage approvals declined by almost 20 per cent between January and May, and there has also been some softening in forward-looking indicators, such as new buyer enquiries.
“At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures.
“The modest rebound in mortgage approvals in June adds weight to the notion that the slowdown will prove temporary, though the underlying pace of demand remains unclear.
“With the labour market strengthening, mortgage rates expected to remain low and consumer confidence rising, activity is likely to recover in the months ahead.
“Over the longer term, the trajectory of house prices will remain crucially dependant on supply side developments.
“While there have been some encouraging signs that construction activity is picking up, the pace of home building continues to run far below most estimates of what would be required to keep up with household formation in the years ahead.”
