House prices edged up by the smallest of margins in May as the property market stayed broadly flat, with buyers holding off making any big decisions before the general election.
The average property sold for £220,706 last month, a rise of 0.4pc compared with April but a fall of 0.2pc when comparing the three months to May with the previous three months - underlining the flat nature of the market, according to Halifax.
Prices are still up 3.3pc compared with May 2016, but that is the slowest annual growth since 2013, and represents a sharp slowdown from the 10pc growth in the 12 months to March 2016.
“The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, is likely to support house price levels over the coming months,” said Halifax’s housing economist Martin Ellis.
This strong economic picture “suggests there will be no surge in forced sellers – making a collapse in prices unlikely,” said Hansen Lu at Capital Economics.
“Given the solid economic backdrop and the low level of homes for sale, we think prices will creep higher over the remainder of this year. In fact, we think prices will rise by 2pc over the course of 2017,” Mr Lu predicts.
The figures match data from the Bank of England which showed the number of mortgage approvals has been relatively steady at between 64,600 and 68,600 per month for the past six months.
At the same time supply is low as a lack of building combines with a relatively modest number of households looking to move homes, particularly at a time of some economic uncertainty.
“Buyers and sellers have been in limbo recently with the market awaiting more certainty from the General Election and Brexit negotiations,” said Jeremy Leaf, a north London estate agent and former RICS chairman.