House prices rose by a strong 2.1% during July despite growing evidence that the market is slowing down, Government figures showed today.

The Office of the Deputy Prime Minister said the average house in the UK now costs £177,474, 14.3% more than a year ago.

The rise, which follows one the previous month of 1.8%, failed to reflect the slowdown in the housing market reported by estate agents and chartered surveyors.

However, Nationwide Building Society also reported a strong increase of 2.1% during July, while Halifax said prices rose by 1.2% during the month.

Both lenders have since said price growth slowed sharply during August, with Nationwide saying increases stalled to 0.1%, while Halifax reported a 0.6% drop in the price of property - the first fall for two years and the sharpest since December 2000.

Tuesday September 14, 2004