Figures from the Office of the Deputy Prime Minister show that house price inflation fell from 14.3 per cent in July to 13.6 per cent in August.
The average house price was £179,486, up from £177,474 in July – a rise of only 1.12 per cent on the previous month compared with 1.8 per cent in the same period last year.
House price inflation in England fell from 13.4 per cent in July to 12.9 per cent in Aug-ust. Scotland saw a fall from 22.3 per cent to 20.2 per cent while house price inflation in Wales was down from 30.4 per cent to 27.6 per cent.
Halifax's house price index for Q3 2004 shows the top 10 property hotspots over the past year are all outside Southern England, with the exception of Hastings.
The biggest annual rise was 38 per cent in Wales, where the average house price is now £142,388.
Prices in London and the South-east have seen the smallest annual gains of 8.1 per cent and 10.9 per cent respectively, with average prices now at £243,034 and £219,153.
Halifax chief economist Martin Ellis says: “While prices continue to rise more rapidly in the North, there are increasing signs that house price inflation here is slowing as first-time buyers face similar difficulties to those in the South buying a home.”