Values rose 0.4 per cent month-on-month in July and were 2.1 per cent higher for the quarter May to July than for the same time frame last year.
The average price of a UK home is now 10 per cent above the August 2007 peak at £219,266.
This is £64,603 (42 per cent) higher than low point of £154,663 in April 2009, according to Halifax.
Annual house price growth is now running at just under a quarter of the levels seen in March 2016, when property values were increasing by 10 per cent year on year.
Jonathan Hopper, managing director of Garrington Property Finders, said: “The speed of price growth has slowed substantially, and at a national level average prices are still flatlining rather than falling as record low levels of supply prop up prices.
“There is genuine buyer intent, and rumours that the government may review the Help to Buy scheme could add fuel to the fire as some hesitant buyers may be spurred into action by the idea of ‘use it or lose it’.
“Yet buyers are intensely price sensitive and won’t hesitate to walk away from a property being offered at anything other than a highly competitive price.
“As the market settles into its traditional summer lull it’s clear there has been no post-election boost to prices.
“While the lack of supply means there is less choice, the benign interest rate environment and surprisingly stable economy mean that buyers with a good chunk of equity behind them are increasingly able to set the tempo on prices.
“Sellers who recognise this and are pragmatic with their pricing are the most likely to be the ones moving this summer.”
The quarterly rise was down from 2.6 per cent in June and is the lowest annual rate of growth since April 2013.
Over the last three months house prices were 0.2 per cent lower than in the previous 12 weeks and represent the fourth successive quarterly fall, the first time this has happened since November 2012.
Russell Galley, managing director at Halifax Community Bank, said: “House prices continue to remain broadly flat, as they have since the start of the year.
“Improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices.
“This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”