House price inflation in the UK has continued its downward trend, with the annual rate of increase dropping to 2.2% over the 12 months to July 2024. This marks a decrease from the revised figure of 2.7% recorded in the year to June 2024, as revealed by the Office for National Statistics (ONS) in its latest House Price Index report.

In July, the average house price stood at £290,000, a £6,000 increase compared to the same time last year.

Breaking it down by region, house prices in England rose by 1.6%, bringing the average cost to £306,000. In Wales, there was a 2.0% increase, pushing the average price to £218,000. Meanwhile, Scotland experienced a sharper rise, with house prices jumping by 6.0% to reach £199,000.

Northern Ireland also saw notable growth. In the second quarter of 2024 (covering April to June), the average house price surged to £185,000, reflecting a 6.4% year-on-year increase.

However, when looking at short-term trends, the pace of house price growth between June and July 2024 slowed. On a non-seasonally adjusted basis, prices edged up by 0.6% during this period, a more modest increase compared to the 1.1% rise seen during the same period last year. After seasonal adjustments, house prices actually dipped slightly by 0.4% between June and July.

Among the English regions, the North East led the way with the highest annual price inflation, where house prices rose by 3.8% over the year to July 2024. London, on the other hand, lagged behind with the lowest inflation rate, experiencing a slight decline of 0.4% over the same period.

Turning to the rental market, there was a similar story of slowing growth. The average rent across the UK increased by 8.4% in the 12 months to August 2024, down marginally from 8.6% in the year to July.

In England, average rents climbed by 8.5% to reach £1,327, while in Wales, rents also grew by 8.5%, with the average standing at £752. In Scotland, rental prices were up by 7.6%, bringing the average rent to £969.

Northern Ireland saw the most significant rental inflation, with rents surging by 9.9% in the year to June 2024.

Within England, London topped the rental inflation charts, with prices jumping by 9.6%, while the South West region experienced the lowest rental growth at 6.4%.

The housing and rental markets clearly show divergent regional trends, with varying inflationary pressures across the country.