Annual house price inflation plateaued at 10.2 per cent in June, the same level as May, but still ahead of 6.9 per cent growth seen last June.
The latest Hometrack index also revealed that Bristol remained the fastest growing city in the UK with a year-on-year growth rate of 14.7 per cent. Year-on-year house price inflation in London and in other cities in the South of England, such as Cambridge, Southampton and Bournemouth, started to slow between May and June.
Conversely, large cities in northern parts of the UK, such as Glasgow, Manchester, Liverpool and Leeds, registered strong growth in the last quarter on the back of more affordable prices, lower interest rates, improving local economies and higher yields.
During the three months ending in mid-July, sales momentum in regional cities and higher house price growth appeared to have held up during the EU referendum period.
In contrast, the London market was marked by rising supply and relatively fewer sales, pointing to slower house price growth in the months ahead.
Richard Donnell, insight director at Hometrack, said headwinds facing the London market in the lead-up to the EU referendum had intensified on the back of the vote to leave and were resulting in slower sales rates.
He added: “This growth in supply reflects a mix of new homes filtering through from London’s expanded development pipeline, investors looking to take capital gains, or selling to de-leverage their investments following the reduction in tax relief on mortgage payments for buy-to let investors.”
Jeremy Duncombe, director of the Legal & General Mortgage Club, said it was interesting to see 10.2 per cent house price inflation being described as stalling.
He added: “While price growth may be flat, it is still significantly higher than wage inflation. This means that houses are still becoming more expensive in real terms, leading to more and more aspiring borrowers finding themselves completely outpriced in the relentlessly competitive housing market.”