The average UK property price hit a record high of £262,954 in August, according to an index.

The typical price is more than £23,600 higher than when the housing market was starting to reopen in June 2020, Halifax said.

London house prices were the highest in the UK - with an average price of £508,503.

This is at an increase of 1.3 per cent.

Annual house price inflation slowed to a five-month low of 7.1% last month, Halifax added.

Wales remained the strongest performing area, with annual house price inflation at 11.6% and the only double-digit rise recorded across the UK during August.

The South West of England was also still experiencing strong growth at 9.6%, probably reflecting the ongoing demand for rural living within the region, the report said.

Some areas appear to have headroom for even stronger price growth, Halifax added, with annual house price inflation in the North East of England at 8%.

In Northern Ireland, annual house price inflation was at 9.3% in August.

In Scotland, house price growth slowed to 8.4%.

Property values across the UK were up by 0.7% month on month or £1,789 on average in August, following a 0.4% increase in July.

Russell Galley, managing director, Halifax, said: “Given the rapid gains seen over the past 12 months, August’s rise was relatively modest and the annual rate of house price inflation continued to slow, hitting a five-month low of 7.1% (versus 7.6% in July).

“However, compared to June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher (or 9.9%).

“Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago.

“However, while such Government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation.

“We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home-working.

“These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break (in England and Northern Ireland) comes to an end later this month.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “While property prices are still rising, the slightly more modest rate of growth reflects reduced intensity in the market compared with earlier in the summer.

“Then, buyers were desperate to take advantage of the full stamp duty holiday; now there are still moderate savings to be made but there is nothing like the same urgency.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “These prices are as much to do with stock shortages and cheap mortgage finance as activity.”

He added: “Market strength has not run its course and we are finding pent-up demand is alive and well, resulting in plenty of transactions, albeit at a lower level than we saw a few months ago.”

Here are average house prices and annual price growth in August, according to Halifax:

– East Midlands, £218,112, 8.7%

– Eastern England, £306,169, 7.3%

– London, £508,503, 1.3%

– North East, £154,629, 8.0%

– North West, £201,143, 9.5%

– Northern Ireland, £165,032, 9.3%

– Scotland, £185,953, 8.4%

– South East, £356,742, 6.8%

– South West, £272,719, 9.6%

– Wales, £192,928, 11.6%

– West Midlands, £222,830, 7.4%

– Yorkshire and the Humber, £184,918, 9.1%

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