Asking prices for homes coming onto the UK market recorded their largest fall of the year so far, after declining almost 1% month-on-month in August.
According to data released by property website Rightmove on Monday (21 August), house prices fell 0.9% from the previous month to £313, 663 ($403,840). However, on a yearly basis, prices climbed 3.1% in August, a faster rate of growth than the 2.8% recorded in July.
A decline in house prices in London was among the main contributors to the overall drop, as prices in the capital declined 1.9% month-on-month in August to £629,270. Despite the decline, however, house prices in London remained 1.6% higher year-on-year.
While Britain's capital experienced something of a lull, the property market in the Midlands recorded a "mini-boom", as an increasing number of people look to purchase property away from London.
Property prices in Northamptonshire surged 9.1% from the corresponding period last year, while Derbyshire recorded a 7.9% increase and prices in Leicestershire, Nottinghamshire and the West Midlands all saw prices rise 7% from a year ago.
Bedfordshire and Worcestershire also recorded a 7% increase from August last year, while prices in Norfolk climbed 7.4%.
"The heat has come off much of the market," said Miles Shipside, Rightmove director and housing market analyst.
"A combination of traditional summertime price blues and the chill of uncertainty in the air has cooled house price growth in some parts of the country and affordability remains very stretched."
London's eye-watering prices coupled with relatively limited supply have turned home buyers away from the capital and onto other parts of the country. Located less than an hour by train away from London, Northampton and Bedford are becoming increasingly popular with commuters, as are Birmingham and Norwich.
"With a shortage of suitable choice in many parts of the country, buyers are becoming increasingly adept at hunting down property that fits their budget," added Shipside.
"High demand and limited supply are still driving momentum, especially in the counties in the middle of the country."
Meanwhile, separate figures from Countrywide forecast the property market outside London will outpace the capital's this year.
Britain's largest estate agent expects prices to have climbed by 3.5% and 2.5% in the east of England in the Midlands respectively by the end of the year, while in greater London they will have flatlined and in central London they will be down by 1.5%.
However, prices for prime properties in central London, could grow 2%, reversing two years of decline.