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Figures released by the Department of Communities and Local Government on Monday, show that the mix-adjusted average house price in the UK in June 2007 stood at £214,222, up from £210,793 in May 2007 (not seasonally adjusted). UK annual house price inflation in June 2007 was 12.1%, up from 10.8% in May 2007. Annual house price inflation in London was 17.5% in June, up from 14.3% in May.

The UK annual house price inflation rate for the 3 months to June was 11.3% and 15.1% in London.

The UK house price inflation rate rose from 10.8% in May 2007 to 12.1% in June 2007. Between May and June there was a rise of 1.6% in the prices index of properties bought compared with a smaller rise of 0.4% over the same period last year resulting in an increase in the inflation rate.

The rise in UK prices between May and June can be attributed to increases in average prices for flats (2.4%), detached properties and bungalows (2.3% each), semi-detached dwellings (1.1%) and terraced houses (1.0%).

Wales saw a decrease in inflation in June 2007. In Wales annual house price inflation fell from 8.5% in May to 7.6% in June. In Scotland the inflation rate stayed the same at 15.6% in May and June. England and Northern Ireland saw house price inflation increases.  In England annual house price inflation rose from 9.6% in May to 11.0% in June; In Northern Ireland annual house price inflation in June was 55.9% compared with 53.0% in May.
 
House price inflation rose in all nine of the English regions. The highest inflation rate was in London (17.5%) followed by South East (10.7%), East and Yorkshire and the Humber (9.6 respectively) and the South West (9.4%). Inflation rates were lower in the North West (9.1%), East Midlands (8.5%) and the North East (8.1%). The lowest inflation rate was in the West Midlands (7.0%).

Mix-adjusted average house prices in June were £221,370 in England, £165,119 in Wales, £160,363 in Scotland and £240,302 in Northern Ireland.

The English region with the highest average house price in June remains London at £332,009. The lowest average price was in the North East at £148,992. Of the English regions, only the East, London, South East and the South West had average prices above the UK average.

The UK house price inflation rate for first time buyers rose from 11.3% in May to 12.4% in June. There was a rise of 1.5% in the prices index between May and June in the properties bought by first time buyers compared with a smaller rise of 0.5% over the same period last year.

The inflation rate for former owner occupiers rose from 10.5% in May to 11.9% in June. There was a rise of 1.7% in the prices index between May and June in the properties bought by former owner occupiers, compared with a smaller rise of 0.4% over the same period last year.

The average price paid by first time buyers across the whole of the UK was £164,755 in June, while the average price paid by former owner occupiers was £238,490.

Analysts say that the Government's figures do not reflect the latest developments in the property market, as the Department of Communities and Local Government bases its survey on the completion date of mortgages. By contrast, Halifax and others base their reports on earlier stages in the process. 

As a result, the DCLG's figures are considered more accurate, but lag behind other reports and will show trends later. 

Halifax published its house price figures for July two weeks ago, showing the fourth consecutive month that house prices have grown by less than 1.0%. Further indications that house price inflation is slowing included an increase by 1.3% between April and July, the smallest three monthly rise since August 2006.

Martin Ellis, chief economist at Halifax, said: "We expect the downward trend in house price growth to continue as the five interest rate rises since last summer have an increasing impact on household spending and housing demand. Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale, particularly in London and the South East, will, however, continue to support house prices."

Mortgage approvals to fund house purchase in the three months to June (Q2) were 4% lower than in the preceding quarter, according to figures by the Bank of England. This continues the downward trend since last autumn with approvals in 2007 Q2 being 8% lower than in 2006 Q4. The level of new buyer interest in purchasing a house fell for the seventh successive month in June, indicating that potential buyers have become more cautious. Completed property sales also fell in 2007 Q2 and were 6% lower than a year ago.

The increase in the proportion of borrowers taking out a fixed rate mortgage in recent years appears to have affected the timing of the housing market's response to interest rate changes, according to Halifax. As a result, house price inflation and activity are likely to take longer to slow as interest rates rise because many borrowers are only affected when their fixed rate deal matures. Over the past 18 months, nearly 70% of new mortgages have been taken out on fixed rate terms; substantially above the average of around 40% since 1993.