In England, house prices grew by 5.6% on an annual basis compared to 0.8% in Wales, 2.9% in Northern Ireland and a 0.9% decline in Scotland.

Rising increases in the East of England of 8.8% and South East of 7.4% were the main drivers of house price growth in the UK. If London and the South East are excluded, the UK-wide annual growth rate is reduced to 4.8% in the 12 months to August.

On a monthly basis, the rate of growth was 0.7%. First-time buyers are paying 3.8% more for their initial home purchase than they were in August 2014 while owner-occupiers are seeing a steeper increase in purchase prices which have risen by 5.8% year-on-year.

Frank Speir of buying agency Prime Purchase said that while growth remained steady the headline figure concealed the fact that the market above £2m was at a complete standstill.

“While the past decade has witnessed a number of seismic events, one of the most notable being the credit crunch, even that didn’t slow down the market as much as the increase in the top level of stamp duty from 7% to 12% in December has done.”

Speir said the problem was a supply shortage which was creating a ‘viscious circle’ and not a lack of interest in buying in that price range.

“..there is nothing for sellers to move to or trade up to so they are staying put convinced that buyers aren’t there in the first place or are being unrealistic as to what something is worth,” he said.

He added: “There is a desperate need for vendors to realign themselves as it is hard to escape the feeling that the market is ready for take off. Vendors could well be surprised by the level of interest that exists among buyers if they were only willing to stick their heads above the parapet and their home on the market.”

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