The latest data on the state of the UK housing market is showing the calm before the storm according to experts. Nationwide reported that the annual rate of house price growth dropped to a two year low in June. The annual rate of house price inflation fell last month to 3.3% from the 4.6% recorded for May. One year ago, house prices were climbing by 11.8%.

The average house price across the UK declined by 0.2% to a level of £195,055.

The fastest growing area was Northern Ireland with an 8% increase in the past year. The average house price in Scotland declined by 1% against last year and Wales fell by 0.8%. London house prices increased by 7.3%.

House prices are forecasted to increase by 6% over the year and another 5% next year according to Nationwide.

Robert Gardner, Nationwide's chief economist, remarked, “House price growth continues to outpace earnings, but the gap is closing, helped by a pick-up in annual wage growth, which moved up to 2.7% in the three months to April from 1.9% at the start of the year.

“The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London.

“In quarter-on-quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters, while the annual rate of price growth in the capital remains the second highest in the country.”

He still expects house prices to rise by 6% this year, and 5% next year.

Prices across London rose by 7.3%.

In Scotland prices fell by 1% compared to a year ago and in Wales they were down by 0.8%.