UK house prices grew at a slower rate in May in a sign that rising inflation and the squeeze on household budgets are cooling the property market.

The Nationwide House Price Index, published on Wednesday, showed annual house price growth was 11.2 per cent in May, down from 12.1 per cent in April.

The modest slowdown is further evidence that steam could be coming out of the UK housing market, following two years of frenzied activity fuelled by the stamp duty holiday and lifestyle changes during the pandemic.

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

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

“Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high,” he said. “At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.”

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

In 1952, the year the Queen came to the throne, the average house price was £1,891 – around £62,000 in today’s money, and cost 4 times average earnings.

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