The Office of the Deputy Prime Minister said on Monday the annual rate of house price inflation in the UK rose to 13.9% in June from 12.2% in May.

However, the annual house price inflation in London was 11.8% in June 2004, down from 12.2% in May.

Although up on this time last year, the rate of house price inflation for first time buyers has slowed, indicating a flattening or possible turndown.

The ODPM said UK house price inflation rate for first time buyers rose to 20.8% in June from 20.7% in May. This was due to an increase of 1.1% in prices between May and June, compared with an increase of 0.9% over the same period last year.

The inflation rate for former owner-occupiers rose to 11.0% in June from 8.7% in May. This was due to a rise of 2.0% in prices from May to June, compared with no change over the same period last year.

The average house price in the UK for first time buyers stood at £139,730 in June, while the average price paid by former owner-occupiers stood at £192,193.

The ODPM said the rise in the average price paid by first time buyers has to be seen in the context of fewer first time buyers entering the market.

Prices - all buyers, all UK

The mix-adjusted average house price in the UK in June 2004 stood at £173,756, up from £170,719 in May (not seasonally adjusted).

Mix-adjusted average house prices in June were £186,215 in England, £130,621 in Wales, £110,765 in Scotland and £106,166 in Northern Ireland.

The English region with the highest average house price in June was London at £262,096. The lowest average price was in the North East at £123,204.