The house price index results released today by the Land Registry, show an increase of 4.2% year on year to August 2015.
On a monthly basis growth was at 0.5%, with the average cost of a home now £184,682. London experienced greater rises with with prices increasing by 1.7%.
The past 12 months to August have seen steepest rises in the East, the South East and London, with price increases at 8.4%, 7.6% and 6.6% respectively.
The North West, the North East and Wales experienced the weakest growth, prices rising by 0.2%, 0.4% and 0.9 % respectively.
It has been noted that today’s figures reveal the slowest annual increase since 2013 and that the market was slower year-on-year, as the number of completed house sales in England & Wales decreased by 13% to 70,404, compared to 80,823 in June 2014.
John Eastgate, sales and marketing director of OneSavings Bank, said: "House prices are still rising, however it is encouraging to see some moderation in the rate of growth, with this being the slowest annual increase for two years, a statistic that will no doubt be well received by prospective buyers.
"We should, however, avoid focusing too much on the short-term.
"This month's figures might show that price growth has slowed, but the fundamentals are such that growth is inevitable over the long-term.
"Ultimately, the supply and demand imbalance will sustain property values. The UK is still desperately short of new housing, yet a combination of historically low mortgage rates and improving access to mortgage finance is sustaining demand."
Legal & General Mortgage Club director Jeremy Duncombe said: “The lack of supply is continuing to drive a wedge between house price inflation and earnings growth. As a result, homes are becoming increasingly unaffordable, putting them out of reach for many aspiring homeowners. The longer this continues, the larger the housebuilding deficit will become, making the housing crisis progressively more difficult to resolve.
“It’s crucial that the Government and the industry work together to remove any barriers that may be limiting construction. Housebuilders are faced with a shortage of skilled workers, materials to build with, and land to build on.
“It’s great to see that the Government has announced a target of one million new homes by the end of this parliament, but this is unlikely to come to fruition until these housebuilding constraints are addressed. Construction has been insufficient for a number of years, and we need a long-term solution to this problem, rather than just a short-term pledge.”