"This is the time of year when we would expect to have more activity and on the ground we are certainly seeing more property coming onto the market "
The data shows that this slowdown in UK house price growth over the past two years is driven mainly by a slowdown in the south and east of England.
The lowest annual growth was in London, where prices decreased by 0.7% over the year, down from an increase of 0.3% in the year to June 2018.
The North West showed the highest annual growth, with prices increasing by 5.6% in the year to July 2018. This was followed by the South West and West Midlands regions (both 4.4%).
On a seasonally adjusted basis, average house prices in the UK increased by 0.3% between June and July 2018, compared with an increase of 0.5% in average prices during the same period a year earlier.
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "With the house price index from the ONS and Land Registry now designated as a national statistic, we take these comprehensive and reliable figures seriously, even though they are a little historic. They reflect the market as it was in the summer months - since buyers and sellers have returned from their summer breaks, there has been a little more enthusiasm to sell homes than we have seen for a while.
"This is the time of year when we would expect to have more activity and on the ground we are certainly seeing more property coming onto the market and more demand. But it is still hard to gain commitment from buyers because property needs to differentiate itself from the competition in order to attract interest and offers.
"Looking forward we are not expecting to see any significant changes or huge movements one way or the other as the market settles down for the rest of the year in a similar pattern."
Ishaan Malhi, CEO and founder of Trussle, added: “The slow house price growth in the market reflects the impact of financial uncertainty prompted by Brexit, high inflation and rising living costs.
"While slowing house price growth might be a relief for those hoping to get a foot on the ladder, it’s still a tough journey for many. A first-time buyer deposit costs just under two years’ of average earnings."
