House prices in the UK increased by 10.5% annually in May, shows Halifax’s latest index.

An eleventh monthly rise in a row saw prices go up by 1% by this metric, leaving the average house price at £289,099.

Halifax says that compared to May last year, prospective buyers need £10,000 more to buy a flat and £50,000 more to buy a detached home.

“Despite the very real cost of living pressures some people are experiencing,” says managing director Russell Galley, “the imbalance between supply and demand for properties remains the primary reason driving the continued climb in house prices.”

He adds, however, that activity has fall slightly, saying: “There is perhaps one green shoot for prospective purchasers; with overall buying demand down compared to last year, we may be past the peak sellers’ market.”

Coreco managing director Andrew Montlake says: “The property market is out of sync with economic reality. Everything suggests prices should be coming down and still they rise, if not at quite the same rate as April.

“However, the house price boom and sellers’ stranglehold on the market will soon be over as inflation takes hold and people’s confidence and spending power are hit for six. Soaring inflation, rising interest rates and the very real prospect of recession ahead will hit demand while lenders are becoming ever more cautious, which will restrict what people can borrow.

“The rate of price growth will almost certainly slow during the second half of 2022 and into 2023. Few can deny that there is now a phenomenal economic storm blowing in and the lack of supply may not be enough to protect prices.”

Garrington Property Fingers chief executive Jonathan Hopper comments: “Despite double-digits dominating this index for four months on the trot, the property market is slowing and some people are having a hard time accepting it.

“Both net mortgage borrowing and approvals have slumped recently. It’s a big wake-up call for a frothy housing market two years in the making that we’re seeing the last days of foam.

“The market became detached from reality two years ago and now buyers have started to be much more careful about making sure the fundamentals of a property deal add up. They can sense change is in the air and know that the economy is likely to be in a very different place in 12 months’ time. After such a blistering run, that goes for the property market too.”

And the Guild of Property Professionals chief executive Iain McKenzie points out that, “according to HMRC, over 433,000 homes in the UK changed hands in the first four months of 2022, making it the third busiest start to a year since 2007.

Last year was an exceptional year due to Covid-19 and 2016 saw a surge prior to the introduction of the 3% additional homes surcharge.”

He adds: “The market has seen some unusually high levels of activity of over the past two years, so it was expected that we would start to see the market cool down to some degree, especially with cost of living pressures mounting.

“Since 1931, there have only been 16 years of house price decline, with every other year seeing rises. A significant readjustment in the market seems unlikely anytime soon.”