The average UK house price hit a record £296,000 in August after surging by £36,000 a year, official figures show.
But experts commenting on the data said expectations had changed significantly in recent weeks due to rising mortgage rates, with the likelihood of a dampening effect on house price growth.
Annual house price growth slowed to 13.6% from 16.0% in July, the Office for National Statistics (ONS) said.
He added that there had been volatility in house prices a year earlier due to stamp duty changes.
Average house prices in the UK rose by 1.1% between July and August this year.
ONS Deputy Director of Prices Division Matt Corder said: “House prices rose slightly during the month, with the annual growth rate falling due to the sharp price increases seen at this time. last year at the end of the stamp duty holiday.”
The average house price in Scotland rose 9.7% in the year to August, hitting a record high of £195,000.
In Wales, typical house prices also hit a record £220,000 after rising 14.6% over the year.
A record was also set in England at £316,000 after house prices rose 14.3% a year.
The average price of property in Northern Ireland has increased by 9.6% per year, reaching £169,000.
In England, the South West recorded the strongest annual growth in house prices in August, at 17.0%.
The weakest annual house price growth was recorded in London, where average prices rose 8.3% in the year to August.
Average house prices in London remain the most expensive of any region in the UK, with a record average price of £553,000 hit in August.
The North East continued to have the lowest average house price, at £164,000 in August, although this was also a record for the region.
Stamp duty was reduced in the recent mini budget, however, mortgage rates have surged in recent weeks amid the recent economic turmoil following the tax event.
According to figures from Moneyfacts.co.uk on Wednesday, the average two-year fixed rate mortgage in the market has a rate of 6.52% and the average five-year fixed rate is 6.36%.
Those who can are suing and making deals ahead of further increases, while others have put plans on hold to digest events.
The Bank of England’s base rate hikes also pushed mortgage rates higher. At the start of December last year, two- and five-year fixed mortgage rates averaged 2.34% and 2.64% respectively.
There are about 900 fewer mortgage products than on mini-budget day.
Chris Druce, senior research analyst at Knight Frank, said: “Current activity in the housing market is shaped by mortgage status.
“Those who can are pushing and making deals ahead of further increases, while others have put plans on hold to digest events.
“With affordability expected to be a growing barrier for many homebuyers in the months ahead, we expect house price growth to slow from here, with price declines in 2023.”
We expect this to have a more pronounced dampening effect on house price growth in the near term.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The August figures reflect demand in May, when we could see some warning signs starting to appear, but not the giant flashing red lights that adorn the market right now.”
Anna Clare Harper of property investment platform IMMO said: “A lot can happen in a matter of weeks.”
She added: “Going forward, the rate of house price growth is expected to slow.”
Nicky Stevenson, managing director of estate agent group Fine & Country, said: “Market interest rate expectations have changed significantly in recent weeks and we expect this to have a more pronounced moderating effect. on the growth of real estate prices in the short term.”
Even a 10% price drop, which some predict, would bring us back to where we were a year ago.
Jonathan Hopper, managing director of Garrington Property Finders, said: ‘Despite being collected just a few weeks ago, the ONS figures are from a different age and a different property market.
“The vibe on the property’s front line has changed almost beyond recognition at this time.”
Tomer Aboody, director of property lender MT Finance, said: “Even a 10% drop in prices, which some are predicting, would take us back to where we were a year ago.”
Jamie Durham, economist at PwC UK, said inflation and rising interest rates “will affect whether people are able to buy, and if they are, how much they are willing to pay. As a result , over the next few months, a decline in property prices seems quite likely.
Jason Tebb, managing director of real estate research website OnTheMarket.com, said: “Higher inventory levels, combined with inflationary pressures, higher energy bills and rising mortgage rates, continue to have an impact.”
This will make it harder for first-time buyers
Nick Leeming, president of Jackson-Stops, said, “This will be a long-term adjustment to a new normal that will likely take time to settle in.
“Yet we expect the market to remain most active at the high end, where spot buying persists and is much less impacted by economic headwinds.”
Iain McKenzie, chief executive of the Guild of Property Professionals, said: “The average price of a house in the UK is now close to £300,000.
“This will make it harder for first-time buyers who are already struggling to get on the ladder due to rising interest rates and the availability of mortgages.”