UK house prices rose 7.8 percent over the year to June, slowing from the 12.8 percent annual rate recorded in May, the Office for National Statistics said on Wednesday.

However, the rate of evolution is distorted by the “increase. [house] Prices shown in June 2021 are the result of tax break changes,” the ONS explained.

The increase comes despite a recent rise in mortgage costs, following the Bank of England’s decision to raise interest rates from 0.1 per cent to 1.75 per cent in December to curb inflation. Economists expect more rate hikes in the coming months, which could lead to higher mortgage payments.

The average UK home paid £286,000 in June, up £20,000 on the same month last year, according to ONS data.

Average prices in England rose by 7.3 per cent to £305,000 a year, in Wales by 8.6 per cent to £213,000, in Scotland by 11.6 per cent to £192,000, and in Northern Ireland by 9.6 per cent to £169,000.

In July, UK inflation rose to 10.1 per cent on news of a house price rise, marking the first time in more than four decades that it has posted double-digit annual growth.

Jean Jameson, chief sales officer at property agents Foxtons, said although London reported the UK region’s lowest annual growth, the capital’s rise of 8.2 per cent from July 2021 would represent “the biggest change in annual property prices since July 2016”.