UK annual house price growth slowed “modestly” in May to 2.4%, from 2.6% in April, according to the Nationwide House Price Index.

During May, house prices fell by 0.2%, after taking into consideration seasonal factors, while annual house price growth has been confined to a “fairly narrow” range of between 2 and 3% over the past 12 months.

Average house prices in the UK in May were £213,618 compared to £213,000 in April, representing a fairly small level of growth in the market.

Commenting on the figures, Nationwide chief economist Robert Gardner said: “Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”

However, Bluestone Mortgages director of sales and marketing Steve has said that while house prices continue to rise year-on-year, “although slow, could overextend already stretched finances for some borrowers and leave them priced out of the market”.

“Ultimately, high-street lenders must acknowledge that the lack of affordable housing, combined with the rising cost of living, is pushing some borrowers over tipping point. These borrowers, however, should be supported in finding solutions and not be unfairly blocked from homeownership solely because of a number on a credit score. These customers are individuals with unique circumstances, and for those who may have experienced a bump in the road, specialist lenders are here to help those feeling the squeeze,” Seal added.

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