House price rises continued to slow during July but the first signs of recovery were seen in some parts of the country, latest figures show.

The average cost of a property in England and Wales rose by 0.4 per cent during the four weeks to July 14, down from 1.3 per cent in each of the two previous months.

Annual house price inflation fell for the seventh month in a row to just 13.2 per cent, compared with a rate of 26.5 per cent in January, according to property web site Rightmove.

However, the group said there were signs of recovery in areas of the country which have been hit hardest by the slowdown, with prices in London rising by 2.1 per cent during the month while in East Anglia they were up by 1.4 per cent and in the South-East they rose by 0.5 per cent.

Yorkshire and Humberside, which saw a 1.2 per cent drop in prices in June, recovered to post a 2.3 per cent rise but at the same time in the previously strong North and the West Midlands the cost of property fell by 1.5 per cent.

In the East Midlands house prices were down by 0.5 per cent, while in Wales and the North West they dropped by 0.4 per cent and 0.2 per cent respectively.

Rightmove also said there had been some signs of a pick-up in activity in the market, with more properties sold than were put up for sale for the second month running.

But it added that the market remained significantly slower than at this time last year, with properties taking an average of 67 days to sell, almost three weeks longer than 12 months ago.

Miles Shipside, commercial director of Rightmove, said: "House price inflation continues to trend down towards the ten per cent level, supporting the view that we are seeing a soft landing.

"What is positive is that renewed purchaser interest is breathing new life into the market and we're seeing more sales agreed than at any time this year."

He said the latest cut in interest rates should help to support consumer confidence and spending, both of which tended to have a positive effect on the housing market.