House price growth in May slowed to its lowest annual rate in nearly five years, according to figures from the closely-watched Office for National Statistics (ONS) house price index.
On average house prices across the UK have risen three per cent in the year to May 2018, falling from 3.5 per cent in April and dropping to the lowest yearly rate of growth since August 2013.
London’s property market largely drove the slump, with house prices in the capital decreasing by 0.4 per cent in the 12 months to May, making it the the fourth consecutive month that ONS data shows London house prices have fallen over the year.
Richard Snook, senior economist at accountancy firm PwC, said: "London continues to be the big story in the regional trends. The strong gains in London last month have been erased by a major downward revision."
Snook added: "Regional figures can be volatile from month-to-month but the figure supports an underlying weakness in the market."
The latest results follow a series of recent house price reports which provide fresh evidence of a subdued London property market, with last week’s Rightmove index showing that the asking price of a house in the capital is down more than £11,000 compared to this time a year ago, marking the sharpest annualised fall since January.
Last week PwC also predicted that London house prices were likely to fall as much as two per cent this year despite an expected rise in every other region of the UK.
Meanwhile, the Royal Institution of Chartered Surveyors (Rics) said that more surveyors have seen a decrease rather than increase in house sales for the last 16 consecutive months.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: "These figures are interesting, as this is the most comprehensive survey of UK house prices, and confirm what we have seen in others and on the ground. In other words, property prices cannot be sustained indefinitely by low stock and mortgage rates. Lower demand is forcing vendors to be more realistic with fewer, more nervous buyers who are prepared to shrug off Brexit concerns."
The findings also showed that detached houses showed the biggest rise in prices, climbing 4.6 per cent to to £344,000 in the year to May.
Meanwhile, prices for flats and maisonettes were unchanged in the year to April at £203,000, the lowest annual growth of all property types.
The ONS said that the weaker growth in flats and maisonettes was "driven by negative annual growth in London for this property type".