UK property prices rose at a slower pace in May, a sign that rising inflation and shrinking household budgets are cooling the property market.

The National House Price Index, released on Wednesday, showed annual house price growth was 11.2% in May, down from 12.1% in April.

The modest slowdown is further evidence that steam could be coming out of the UK property market, after two years of frenetic activity fueled by stamp duty holidays and lifestyle changes during the pandemic.

But while experts predict the cost-of-living crisis could further dampen transactions, they said the figures also indicated the housing market remained buoyant.

Robert Gardner, chief economist at Nationwide, said while he expected the housing market to slow “as the year progressed”, it “retained surprising momentum” in May.

“Demand is being supported by strong labor market conditions, where the unemployment rate has fallen to a 50-year low, and with job vacancies at a record high,” he said. . “At the same time, the stock of housing in the market has remained low, maintaining upward pressure on house prices.”

Double-digit price increases during the pandemic had exaggerated a decades-long trend of property values ​​outpacing inflation and wage growth, Nationwide added.

In 1952, the year the Queen took the throne, the average house price was £1,891, or around £62,000 in today’s money, and cost 4 times the average wage.

This means that current average house prices are 4.3 times higher than 1952 levels in real terms.