Property price inflation has fallen back slightly to 4.2% a year in England and Wales, according to the latest figures from the Land Registry.

The typical home is now worth just under £185,000 following a 0.5% rise in values between July and August. The largest year-on-year increases were chalked up in the South-east of England, where values rose 7.6%.

In London, prices were up by 6.6% between August 2014 and the same month this year. This added more than £30,000 to the cost, taking the average house price in the capital to more than £493,000.

Rob Weaver, director of property at residential investment platform Property Partner, said: “The market snapped back into its geographical default mode in August, with London once again putting in the strongest performance. What’s also clear is that the north/south house price divide is still very much in evidence.

“Annual growth in the North-east and North-west is way off the pace compared to the South.”

Andy Knee, chief executive of LMS, said that economic issues had resulted is slightly lower increases in August.

“From a 1.7% month-on-month increase in average house prices from June to July, the latest Land Registry data shows a less weighty increase of just 0.5% from July to August, an indication of a seasonal slowdown after a busy summer. The impact of highly volatile global capital markets as well as the announcement of a likely base rate rise in the future can also be felt across the UK housing market.”

But Knee added that a lack of supply remained a problem. “While the promise of extra housing is encouraging and targets for building a much-needed step, the government needs a far more stringent and cohesive approach to housing to tackle the problem head on.”