UK house prices rose at their slowest pace for more than two years, according to mortgage lender Nationwide.

House prices rose 3.2 percent year-on-year in August, compared with a 3.5 percent rise in July.

However, Nationwide’s chief economist Robert Gardner noted the importance of increasing construction:

“However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates.

“Surveyors reported the lowest ever number of properties on their books in July – on data extending back to the late 1970s – whilst new buyer enquiries picked up.”

Rival mortgage lender Halifax’s figures show a faster pace of growth then Nationwide’s, although theirs has also slowed significantly. Halifax reported earlier this month that house prices across the UK were rising at 7.9% a year; however both lenders use different methods to achieve their results.