According to the Office for National Statistics (ONS) house price index for the month, this was lower than the 0.7 per cent growth recorded in the year to July.
On a monthly basis, there was a 0.3 per cent change in average house prices across the UK.
Regional differences
There was no annual change to average house prices in England, which came to £310,000 in August. Compared to July, this was up by 0.2 per cent.
The East of England reported the sharpest annual fall in average house prices with a 1.6 per cent decline to £351,000. This was followed by London where average house prices decreased by 1.4 per cent to £536,000.
The strongest annual growth across England was recorded in the North East, where prices rose by 3.6 per cent to £165,000. This was followed by Yorkshire and the Humber, where prices increased by 2.2 per cent annually to £213,000.
In Wales, there was a 0.1 per cent yearly decline in average house prices to £217,000. The same change was recorded on a monthly basis.
Average house prices in Scotland rose by 1.1 per cent year-on-year to £194,000, while in Northern Ireland, there was a 2.7 per cent increase to £174,000.
Property and buyer types
The value of semi-detached homes saw the largest annual increase of 0.9 per cent to £283,000, while detached homes reported a 0.8 per cent rise to £458,000.
Terraced homes suffered the sharpest decline in value with a 0.9 per cent yearly fall to £237,000 while the value of flats and maisonettes decreased by 0.2 per cent to £237,000.
On average, first-time buyers paid £242,000 for their homes, a 0.1 per cent yearly increase and a 0.4 per cent monthly rise. Former homeowners paid £341,000, a growth of 0.3 per cent annually and monthly.
Buying power
Gareth Lewis, managing director of property lender MT Finance, said prices were fairly flat as the “market trundles along with a reduced number of transactions”.
He added: “Once we are in a settled interest rate environment, it will breed more confidence and people will be happier to transact. In the meantime, we don’t expect to see a price crash but rather a further softening in values.”
Matt Thompson, head of sales at Chestertons, said buyers were adopting a strategic approach in August by “adjusting their budget or widening their search criteria to find a suitable home”.
He added: “Although some buyers took a break during the August holidays, others utilised the month to enter price negotiations or seal the deal by signing contracts.”
Iain McKenzie, CEO of The Guild of Property Professionals, backed this point up, saying: “What we are seeing on the ground is that sellers are increasingly more flexible when it comes to the offer they are accepting, and this may be helping the market.”
Guy Gittins, CEO of Foxtons, also said sellers were “having to be more competitive with their property pricing in order to stimulate buyer demand. This puts buyers in the driving seat when it comes to negotiations, but sellers that adjust their pricing accordingly are successfully transacting”.
A correction or a fall?
Matt Surridge, sales director at MPowered Mortgages, said it was no longer possible to ignore falling house prices and said the market had not seen the same seasonal pickup at the start of the quarter that usually happened.
Surridge added: “Hopefully, we will see a levelling of house prices shortly, supported by falling mortgage rates and product innovation.”
Sasha Sprake, head of business development at Finova Connect, said: “Despite the recent softening of house prices, it’s important to acknowledge that average prices are still higher than pre-pandemic levels and are changing in nominal terms.
“The gap between demand and housing supply also persists and will continue to place pressure on house prices for some time.”
