"Activity levels, like house price growth, have softened compared with the final months of last year."
In the three months between April and June, prices were 0.7% lower than in the preceding three months, although Halifax says the figure appears to be a symptom of the monthly volatility in the data with the particularly weak April number in between two fairly strong months.
On a monthly basis, prices rose by 0.3% in June to £225,654.
Russell Galley, managing director at Halifax, said: “House prices continue to remain broadly flat, with the annual rate of growth marginally slowing from 1.9% in May to 1.8% in June.
“Activity levels, like house price growth, have softened compared with the final months of last year. Mortgage approvals have been in the low range of 63,000 to 67,000 since the start of the year, whilst home sales have remained flat so far this year. This is in contrast to the continuing strength of the UK jobs market with job creation still strong and pressure on household finances easing as real income growth edges up.
“At the half way stage of the year the annual rate is within our forecast range of 0-3% for 2018. We continue to see very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale should also continue to support price growth.”
Founder and CEO of Emoov, Russell Quirk, commented: “The UK market may have come off the boil slightly where house price growth is concerned, but property values are still up annually while supply levels remain subdued and continue to be exceeded by buyer demand as a result of mortgage affordability. These are not the ingredients for a market crash and it highly unlikely that we will see anything other than stable growth and an uplift in market activity throughout the remainder of the year.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: "Once again, we are seeing a market in subdued mode supported broadly for some time by low interest rates and unemployment, as well as more specifically by low stock. These figures, though a little historic, command attention as Halifax is the country’s biggest mortgage lender.
"On the ground, we have reached the limit of what many buyers can afford so this is not a correction, more a realignment of prices to reflect changes in circumstances and to address the potential standoff between buyer and seller."