House price inflation continues to slow

Residential property prices in the UK only increased slightly in July, official figures indicate.

Data released by the Land Registry shows that house prices in England and Wales rose just 0.1 per cent over the month. This means that landlords will typically have to spend £181,460 to add to their portfolio of property.

The monthly rise means that house prices have increased by 8.8 per cent in the last 12 months.

A statement from the Land Registry read: "Whilst still positive, the 0.1 per cent rate of monthly increase is the lowest rate experienced since June 2006.

"The growth rate divergence between London and the rest of the country persists. London and to a lesser extent, the south-east, continues to ensure positive house price inflation."

Indeed, the figures show that prices in London rose by one per cent in July, meaning that annual house price inflation in the capital is running at 15.5 per cent.

As people wait to see what effect potential future interest rates will have on the UK housing market, many may decide to continue to rent.

Indeed, Paragon Mortgages recently suggested that private rented accommodation provided much needed stability for the UK housing market.

Nigel Terrington, chief executive of Paragon Group, explained: "Buy-to-let provides housing for young people, who otherwise would be forced to buy and be stretched beyond their means."