The slowdown has been driven by the South and South East of England, with London prices falling by 0.4% year-on-year.
House price growth fell to 3% in the year to May 2018 – the lowest annual rate since August 2013, the ONS house price index shows.
The reduction has been driven by the South and South East of England, with London prices falling by 0.4% year-on-year.
The slowdown may not last forever however.
Russell Quirk, chief executiveof Emoov.co.uk, said:“A reduction in buyer enquiries and a fall in transaction levels, is always going to bring a slow in price growth as a direct consequence.
"This has largely been driven by a lack of housing stock reaching the market as UK sellers adopted the wait and see approach.
"However, we are starting to see market activity heighten on the supply side and it won’t be long before this filters through to potential buyers.
"While the demand-supply seesaw is finely poised at the moment, once it tips and buyer interest overtakes the stock available, price growth will inevitably pick up the pace and return to previous levels."
The East Midlands has the highest annual growth, with prices increasing by 6.3% in the year to May 2018. This was followed by the West Midlands (5.0%).
John Goodall, chief executive of buy-to-let lender Landbay, said: “House prices succumbed to an early summer slowdown in May, helping to provide a slight respite for those hoping to get a foot on the property ladder.
“However, the overall cost of living and outstandingly high deposit costs continue to prevent many aspiring homeowners from entering the market.
“The private rental sector is increasingly becoming a crucial part of the housing mix and needs to be supported now more than ever.
“Recent government initiatives to professionalise the buy-to-let market and improve tenancy conditions are certainly a step in the right direction, but investment in building more properties specifically designed to rent will help to ensure the cost of renting doesn’t hit unsustainable levels.”
Ishaan Malhi, chief executive of online mortgage broker Trussle, said: “House prices are rising at a slower pace than they have been over the past few decades. While we’re beginning to see property prices stabilise, purchasing a first home still feels like a huge leap for many.
“Schemes such as the Help to Buy ISA can help first-time buyers save a higher amount, but more needs to be done to help people get onto the property ladder during uncertain times.
“With the appointment of yet another new Housing Minister, confidence in the housing market is low. We need to encourage widespread innovation and stable leadership to achieve the nation’s dreams of owning their own homes.”
