"This slight deceleration suggests that the post-pandemic housing boom may be finally running out of steam"

Gabriel McKeown, head of macroeconomics at Sad Rabbit Investments said: "In a surprising twist, the UK housing market is showing signs of divergence, with house prices showing signs of cooling while the rental market continues to surge ahead.

"Despite a combination of competitive mortgage products and the potential for further interest rate cuts, this slight deceleration suggests that the post-pandemic housing boom may be finally running out of steam.

"However, while homeowners may be breathing a sigh of relief at the moderating price growth, tenants are finding little respite.

"This continued strength in the rental market can be attributed to a perfect storm of factors, with a squeeze on mortgage affordability pushing potential buyers into renting.

"Furthermore, as Chancellor Reeves sharpens her fiscal scalpel with landlords on the cutting block, a mass exodus from the rental market has already begun.

"Against this backdrop, the impact could be devastating, with the cost-of-living crisis making it harder to save for deposits, trapping many in a rental spiral."