BRIGHTON and Hove remains in the top four for the highest house price increases despite UK rises being at their slowest for two years.

Prices in Brighton rose by 10 per cent in June against the year before with the average house price now at £406,479, Nationwide Building Society has reported.

Looking at towns and cities across the UK, Nationwide said Reading was the best-performing place, with prices having surged by 13 per cent over the last year to an average price of £335,097.

Next was Oxford, where values recorded a 12 per cent increase. Coventry was third with a 10 per cent year-on-year increase and an average house price of £190,253. Bristol came after Brighton and Hove in fifth with a 10 per cent increase to an average house price of £289,253.

Steve Cales, director at Cales & Co estate agents in Portslade, said he agreed that price increase will be slowing down.

He said: “There’s no doubt they are peaking now.

“Prices have been artificially inflating for 12 to 18 months and prices are coming down a little bit.”

Mr Cales said prices have been rising due to the shortage of properties on the market and though that has not changed, prices are hitting a ceiling of what buyers can afford.

Nationwide stated prices have gone up 61 per cent in 10 years.

But Mr Cales said wages cannot keep up.

He said: “People’s wages can’t keep up with the growth levels we’ve seen.

“Prices have gone up but wages have not gone up a lot.”

But Matthew Pointon, a property economist at Capital Economics, said any dip in prices in June is “not a sign of a cooling market”.

He predicted that annual price increases will pick up, and that prices at the end of this year will be 6 per cent higher than they were at the start.

Mr Pointon said: “For the country as a whole, the conditions are in place for a period of firmer house price gains.

“Active housing demand has finally started to pick up, as record low mortgage rates tempt more people into the market.”

Northern Ireland, where prices fell sharply in the wake of the economic downturn, overtook London to record the strongest growth on a regional basis, at 8 per cent.

London had a year-on-year increase of 7.3 per cent, taking the average property price to £429,711.

Wales and Scotland were the only regions to see prices fall year-on-year, recording declines of 0.8 per cent and 1 per cent respectively.

Despite the acceleration of house price growth in Northern Ireland of 8 per cent, average values there are still around 45 per cent below their 2007 peak levels, Nationwide said. The average house price in Northern Ireland is £126,525.