HOUSE prices rose by 1.1 per cent during July, but the annual rate of growth continued to slow, Government figures have shown.

The Office of the Deputy Prime Minister said the monthly rise was driven by a 2.1 per cent increase in the cost of a detached house, while the price of bungalows rose by 1.3 per cent.

Modest gains were seen across all property types, with the average cost of a semi-detached house rising by 0.9 per cent, while terraced house prices were 0.6 per cent higher and flats were 0.4 per cent more expensive.

At the end of July, the average cost of a property in the UK stood at £186,207, up from £184,162 a month earlier.

But despite the month-on-month rise, the annual rate of house price inflation continued to slow, dropping to four per cent for the year to the end of July, down from five per cent in the 12 months to the end of June.

The figure was also well down on the 14.3 per cent that annual growth was running at in July last year.

The annual rate of house price growth fell in all regions.

Annual growth remains slightly stronger in northern regions of England and Wales.

Despite the slow growth, London remains the most expensive place in the UK to buy a property, at an average of £270,285, while Scotland is the cheapest at £127,945.

People trying to take their first step on to the property ladder are now having to pay about six per cent more than they did in July last year, with the average first-time buyer's home now costing £153,168.