Home costs are nonetheless a lot greater than this time final 12 months, in accordance with the Nationwide Constructing Society, however the tempo of development has slowed for the third month in a row.
Costs have been 11.2% greater in Could than a 12 months earlier, though there are indicators that the housing market is beginning to decelerate, after hitting 14.3% in March and falling to 12.1% in April.
“Family funds are prone to stay beneath stress with inflation set to succeed in double digits within the coming quarters if international power costs stay excessive,” stated Robert Gardner, Nationwide chief economist.
Costs additionally elevated by 0.9% between April and Could, taking the common home worth to £269,914, a Nationwide index reveals.
Demand for properties remains to be excessive, whereas the provision of homes approaching to the market is low, the mortgage lender stated, supporting robust costs.
“We proceed to count on the housing market to sluggish because the 12 months progresses,” stated Mr Gardner.
“Family funds are prone to stay beneath stress, with inflation set to succeed in double digits within the coming quarters if international power costs stay excessive.”
He stated client confidence had collapsed, and additional rate of interest hikes from the Financial institution of England would probably cool the housing market additional as they fed in to mortgage charges.
On Tuesday, the central financial institution stated that mortgage borrowing fell by 36% in April in one other sign that the red-hot housing market is beginning to lose momentum within the face of rising inflation and a value of dwelling disaster.
Web mortgage borrowing dropped to £4.1bn final month from £6.4bn in March.
Mortgage approvals for home purchases additionally fell, from 69,500 to 66,000.