The slowdown in the annual rate of house price growth resumed in May, according to the latest study by Nationwide.The building society measured prices 4.6% higher last month than a year earlier, slowing from an annual growth rate of 5.2% in April.
It said a rise of 0.3% month-on-month saw UK property values hit a new record high of £195,166 on average, with a lack of supply continuing to support the market.
Cash buyers represented 38% of all purchasers in the first quarter of the year – also a new high – Nationwide estimated, but said the proportion was only slightly above the trends of recent years.
Nationwide said it expected the annual rate of growth to continue to ease – a scenario that began last summer in the wake of tighter controls on mortgage lending amid concerns over affordability.
Robert Gardner, its chief economist, said: “Annual house price growth is now running at less than half the pace prevailing in mid 2014.
“Over the longer term we would expect house price growth to converge with earnings growth, which has typically been around 4% per annum.
“However, much will depend on supply side developments – in recent years the rate of building activity has remained well below that required to keep up with population growth.”
The Government has pledged to support doubling the number of affordable homes being built in the current Parliament, aided by various schemes including Help To Buy and an easing of brownfield site building restrictions.
Sellers were thought to have delayed putting their homes on the market because of uncertainty over the General Election result.
While activity may pick up, purchases have been supported by some of the lowest ever mortgage rates in recent months.
The Bank of England released figures on Tuesday showing the number of mortgage approvals made to home buyers lifted to a 14-month high in April.