"The residential property market has not fallen off a cliff post-Brexit as some had predicted. Quite the opposite, these latest Halifax figures show stability and a degree of resilience."
This was down from 8.4% in July, continuing the downward trend since March when the annual rate reached 10.0%.
House prices in the three months to August were 0.7% higher than in the previous quarter, down from 1.5% in July.
The quarterly rate of increase has been on a downward trend over the past six months since peaking at 3.0% in February, according to the data.
House prices declined by 0.2% between July and August.
Martin Ellis, Halifax housing economist, said: “House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase. There are also signs of a softening in sales activity.
“The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015. Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.”
However the industry says despite the annual drop, the figures are 'reassuring'.
Jonathan Hopper, Managing Director of Garrington Property Finders, said: A year ago many would have regarded such a slowdown in house price rises as cause for concern. But in today’s environment they are curiously reassuring – as they are further evidence that the post-Brexit property market is making a soft landing rather than slumping.
Alex Gosling, CEO of online estate agents HouseSimple, agreed, stating: “The post-Brexit armageddon and its predicted dire repercussions for the property market simply haven’t materialised.
“House price growth has slowed by 0.2% since July, but it would be hysterical to attribute this softening to anything but a seasonal slowdown. September will provide a much better gauge as to the health of the housing market, as typically the number of buyers and sellers picks up significantly.
“All in all, house price growth - buoyed by a strong labour market - is showing itself to be remarkably resilient to the macroeconomic headwinds that have swept the UK over the last six months. The shortage of stock continues to be a concern, but the hope is that any fears around the impact of the EU vote have dissipated."
Rob Weaver, Director of Investments at Property Partner, added: "The residential property market has not fallen off a cliff post-Brexit as some had predicted. Quite the opposite, these latest Halifax figures show stability and a degree of resilience.
“Despite a general dampening in house prices with the backdrop of uncertainty over leaving the EU, they continue to be supported by the structural defects in the market.
“Any fall in demand after the stamp duty hike in April has been offset by the lack of supply in the summer months. While the market has slowed to a degree since the referendum, the annual and quarterly rates of growth are positive signs for investors."
