UK prices increased two per cent overall in the year to July, the data showed, spurred on by London prices which soared 5.7 per cent in the same period.
Excluding the solid increases in London and the south east, prices across the UK grew just 0.6 per cent.
“It’s a testament to the resilience of the housing market and the important role played by cash buyers that house prices are rising annually, despite the bleak economic outlook and moribund mortgage market,” said David Newnes at LSL Property Services.
The data comes after other house price indices also suggested July saw mild expansion, driven by a London boom.
The ONS figures confirmed the trend with additional data that includes cash purchases as well as mortgage-financed transactions.