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The annual rate of house price growth fell to a two-year low last month, Says Nationwide building society.

The annual rate of house price growth fell to a two-year low last month, the Nationwide building society has said. Annual house price inflation fell to 3.3% in June from 4.6% the month before, it said. Just a year ago, prices were rising by 11.8%.

However, house prices in Wales and Scotland have actually fallen over the last year, according to Nationwide. Between May and June prices across the UK fell by 0.2%, taking the average cost of UK property to £195,055.

Robert Gardner, Nationwide's chief economist, said: "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."

Last month, a survey by property services group LSL suggested that prices in parts of central London had fallen by up to 22% since last autumn.

Some economists had not expected to see house price inflation falling so consistently.

"While we are slightly surprised by June's dip in house prices, it does not fundamentally change our view that house prices are likely to be firmer over the second half of the year," said Howard Archer, chief UK and European economist at IHS Global Insight. He still expects house prices to rise by 6% this year, and 5% next year.

Matthew Pointon of Capital Economics said the monthly price fall did not mean the market was cooling. "On an underlying basis prices are still rising, and with active housing demand finally recovering, annual house price gains have bottomed out," he said.

Nationwide said the region with the fastest price growth is now Northern Ireland, where prices rose by 8% over the year. Prices across London rose by 7.3%.

In Scotland prices fell by 1% from a year earlier, and in Wales they were down by 0.8%.

House price changes (Q2 2015 v Q2 2014)

Region

Annual change

Average price

Northern Ireland

8%

£126,525

London

7.3%

£429,711

Outer London

6.8%

£315,620

Outer South East

6%

£244,119

East Anglia

5.2%

£198,826

East Midlands

4.1%

£160,482

South West

3.8%

£215,363

West Midlands

3.4%

£165,873

Yorks and Humber

3.3%

£147,387

North West

1.4%

£146,908

North

0.1%

£125,189

Wales

-0.8%

£144,701

Scotland

-1%

£140,512

     

Source: Nationwide

   

However there are large variations between prices in individual cities.

Among the property hotspots are Reading, where prices have risen 13%, Oxford, where prices are up 12%, and Edinburgh, where they are up by 11%.

Places with falling prices include Sunderland, at -4%, and Nottingham, Highlands and Islands - and West Yorkshire, which have all seen falls of 2%.