The property market has cooled faster than in the height of the financial crisis as buyers contend with soaring interest rates and rampant inflation.
House price growth slowed from 12.8pc to 7.8pc between May and June, one of the biggest monthly drops in annual growth ever recorded by the Office for National Statistics.
In the throes of the financial crisis, house price growth fell from a high of 10.8pc in June 2007 to a low of -15.6pc in February 2009, a fall of 26.4 percentage points.
But the largest monthly slowdown during this time was an annual rate drop of 2.5 percentage points. In comparison, annual house price growth fell by 5 percentage points in just one month between May and June 2022.
The slowdown was so large partially because the annual growth rate was based on huge house price rises recorded in June 2021, the final month in which buyers could benefit from the full stamp duty holiday.
Lawrence Bowles, of estate agency Savills, said: “Last June we saw a rush in sales activity and extremely high levels of price growth as buyers raced to complete before the end of the stamp duty holiday.
“So, it’s natural that the most recent annual figure should fall. It emphasises just how distortive the stamp duty holiday has been on the housing market.”
The average property value climbed to £286,000 in June, a jump of £20,000 in the space of a year.
Annual house price growth cooled from 13pc to 7.3pc in England, slowed from 14.1pc to 8.6pc in Wales and remained steady at 11.6pc in Scotland.
Experts have warned price falls are imminent as the cost of living catches up with the housing market.
Real wages have plunged while households' outgoings and mortgage rates have surged, making it much harder for borrowers to afford a mortgage and reducing buyer demand. Fewer buyers and less competition puts downward pressure on house prices.
The Centre for Economics and Business Research, an analytics firm, has predicted a year-long downturn in 2023 when prices will fall by 4pc.
Capital Economics, another analyst, has forecast a two-year property market downturn, with price falls of between 5pc and 10pc by the end of 2024.
Yet last month's growth slump is not the biggest rate fall in recent years, with annual growth slowing from 13.2pc in June last year to 7.1pc the following month – an anomalous drop of 6.2 percentage points in the wake of the stamp duty holiday beginning to taper off.