Halifax has reported that house prices in the three months to August were 0.7% higher than in the previous quarter, down from 1.5% in July.
The annual rate of growth fell from 8.4% in July to 6.9%.
The average price of a house is now £213,930, Halifax said.
Martin Ellis, Halifax housing economist, said: “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.
“The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015. 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.”
Ian Thomas, director at online mortgage lender LendInvest, said: “There have been a number of external factors that have chipped away at the property market in recent months, from the additional Stamp Duty charge to Brexit, with the traditional summer slowdown weighing in as well. While transactions have certainly slowed in central London as a result, the sentiment we get from buyers around the rest of the country is that it is close to business as usual.
“September will be a useful barometer for what comes next for the property market, as transactions tend to pick up once the holiday period is over. Nonetheless the fundamentals of the property market are unchanged – we do not have enough homes, and we aren’t building enough homes to address that shortage. That will act as a brake on any house price softening in the months to come.”
