House prices soared by 13.6% in the last year, Government figures show, with the typical home now worth almost £300,000.
But experts say they will fall, as the UK faces uncertain economic times.
Property prices rose 13.6% in the year to August, the Office for National Statistics said today.
That is down from a 16% rise in the year to July. The average UK home is now worth £295,903.
Month-on-month, house prices rose the most in the East Midlands - 2.3%.
The West Midlands saw house prices fall - by 0.2%.
Experts say all regions are due to see falling house prices soon.
Myron Jobson, senior personal finance analyst at interactive investor, said: "There is a clear and obvious lag between the latest official data on house prices and what is happening in the property market at present.
"More up-to-date house price indices paint a picture of a housing market that is running out steam, with rising mortgage rates and the escalating cost-of-living crisis cooling demand for homes."
House prices are set to drop over the next year due to surging mortgage rates with a chief economist saying "storm clouds are visible".
Experts say house prices are set to drop by 10-15% over the next two years.
Tom Bill, head of UK residential research at Knight Frank, said: " It’s a fairly safe bet that UK house prices have now peaked.
"The impact of rising mortgage rates will begin to hit demand and spending power in coming months, which we believe will lead to a fall of 10% over the next two years for UK prices.
"We may see mortgage rates fall to some extent if financial markets become more reassured by the government’s economic plan but the events of the last fortnight have been a reminder that the era of ultra-low rates is coming to an end."
Analysts think house prices could drop because would-be homebuyers struggle to afford property due to higher interest rates, rising inflation and the risk of recession.
Most homebuyers use mortgages to buy homes, and the price of these have been soaring quickly.
Experts think the Bank of England could raise base rate from 2.25% to 6% next year, as the central bank battles against high inflation.
Consumer price index (CPI) inflation hit 10.1% in the 12 months to September, the latest figures from the Office for National Statistics (ONS) show.
It means inflation is once again in double figures and is up from the 9.9% recorded the month before.
The last time CPI - which is used to illustrate how prices have risen over time - was this high was 40 years ago, in 1982.
ONS data shows the price of food and energy were the largest contributors for the jump in inflation.
Food and non-alcoholic beverage prices rose by 14.5% in the 12 months to September 2022.
