Annual house price slowed to 3.2% in August 2018 from 3.4% in July 2018, the ONS House Price Index has revealed.
House prices are rising the fastest in the East Midlands at 6.5%, followed by the West Midlands at 5.1%.
London prices fell by 0.2% annually and 0.5% on a monthly basis.
Kevin Roberts, director of Legal & General Mortgage Club, said: “Slower house price growth is certainly music to buyers’ ears, but challenges remain. Saving for a deposit is still the largest barrier to homeownership, with those in London having to save for up to 17 years if buying alone.
“Meanwhile, for those further up the ladder, the cost of stamp duty is discouraging some homeowners from moving – opting to ‘improve, not move’, instead.
“With the Autumn Budget fast approaching, we need to see the government deliver a clear strategy if we are to resolve our housing situation.
“Whether that be clarifying the future of the Help to Buy scheme beyond 2021, a stamp duty break for last-time buyers, or building on green belt land, more action must be taken if we are to see more buyers achieve homeownership.”
Dilpreet Bhagrath, Mortgage Adviser at Trussle, said: “Subdued economic activity and ongoing pressure on household budgets is putting people off moving, so there is less demand from new buyers. Many people are also hesitant due to Brexit negotiations.
“Many homeowners will be concerned about seeing equity they’ve built up over the years eroded by falling house prices, however a fall in house prices isn’t necessarily long-term.”