On a monthly basis prices were up 0.4% though quarterly wise they fell by -0.2%.
Annual house price growth was flat at 2.1% in July 2017, Halifax’s house price index has found.
On a monthly basis prices were up 0.4% though quarterly wise they fell by -0.2% to average at £219,266.
Russell Galley, managing director, Halifax Community Bank, said: “Prices in the three months to July were marginally lower than in the preceding three months, while the annual rate of growth has edged down from 5.7% in January to 2.1% in July; the lowest rate since April 2013.
“The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5%, the lowest since June 1975. However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices.
“This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”
Russell Quirk, founder and chief executive of eMoov.co.uk, said the figures represent promising signs for the UK housing market with further evidence of a marginal uplift in prices on a monthly basis.
He added: “Time certainly seems to have been a healer and as we move away from the previous period of political uncertainty that has plagued the property market of late, we should see a growing degree of stability return for UK homeowners.
“Although prices are still down on the previous quarter and price growth is likely to remain fairly subdued for the remainder of the year, they continue to be up on an annual basis and given the current seasonality an increase no matter how small is a good sign during the peak of the summer months."
Jonathan Samuels, chief executive of the specialist lender, Octane Capital, felt the market is in ‘slowdown mode’.
Samuels said: "Only the lack of properties for sale is preventing the market from deteriorating more quickly.
"While the jobs market is strong, buyers are increasingly feeling the pinch due to stubbornly high inflation and low wage growth.
"Squeezed finances will invariably see new house purchases put on the back burner.
"At the higher end of the market, stamp duty has put countless transactions to the sword.
“Prospective buyers cannot see much of promise on the horizon.
"There is a lot of economic uncertainty right now and the prospect of interest rates rising cannot be discounted.
"Major question marks around the impact of Brexit are also causing many people to sit on their hands.
"Extremely competitive mortgage rates and high employment are helping the market tick over but it's hard to see any change in the current limbo for the rest of the year."
Jeremy Duncombe, director, Legal & General Mortgage Club, was worried about the impact of rising prices on first-time buyers.
He said:“Year-on-year house prices continue to creep upwards, in spite of political and economic headwinds.
“With prices still rising, first-time buyers are now on average having to save for over 11 years to save enough just for a deposit, and for those who are unable to save, they face staying in Generation Rent indefinitely.
“A long-term plan to address the UK’s chronic lack of suitable housing remains vital, but that plan also needs to be put into action.
“Government and industry must come together, and soon, to make a conscious effort to resolve the housing crisis and create enough homes for our growing population, across all tenures – renters and buyers.”
