The recent slowdown in UK house prices suggests that the market is cooling, but very few experts are surprised.

The latest house price index released by Halifax yesterday revealed that property price inflation fell to 3.3% in May, down from 3.8% in the year to April, amid growing economic and political uncertainty, as well as rising inflation which is having an adverse impact on buyer confidence and squeezing affordability.

Jonathan Hopper, managing director of Garrington Property Finders, said that the “drumbeat of a slowing market is getting steadily louder”, but insisted that it is still unclear as to whether we are seeing a “stumble or a stagnation” in values.  

He commented: “For too long the gap between house price growth and wage growth has been a gulf. This was unsustainable and it was inevitable that prices would ease, especially in the areas where they had been rising fastest.

“But nothing puts the brakes on the housing market more than the sense that prices may ease in future. Would-be buyers are quick to sit on their hands if they think waiting could save them money.”

Howard Archer, chief economic adviser to the EY ITEM Club, is also among those who expect to see the fundamentals for house buyers deteriorate further over the coming months.

“Consumers’ purchasing power has been squeezed further by a combination of higher inflation and muted earnings growth,” he said.  

“It is also possible that the labour market could increasingly falter despite its current resilience,” Archer added.

Meanwhile, David Hollingworth of L&C Mortgages, said that it was practically unavoidable that annual house price growth would slow, given that transaction levels have fallen at a time of substantial uncertainty for potential homebuyers. 

He commented: “Higher inflation and the resulting higher cost of living, combined with uncertainty around the outcome not only of the election, but also Brexit negotiations, are bound to see some buyers and sellers adopt a wait and see approach. However, that in turn limits supply of homes on the market and with ultra low mortgage rates widely available, prices are still likely to hold up.

“Demand from first time buyers remains good and they will have a better chance to build a deposit without prices spiralling out of their reach quicker than they can save. That may also be helped by the reduced level of activity in the buy-to-let market as landlords get to grips with higher stamp duty charges, reduction in tax relief and tighter lending criteria.”