House prices rose by 1.3 per cent during May after growth ground to a halt the previous month, figures showed today.
But despite the increase, which puts the average price of a house at £124,752 sterling, annual house price inflation for the year to the end of May fell to 21.3 per cent from 22.2 per cent the previous month.
Nationwide said it expected annual house price inflation to decline further during the next few months, with smaller monthly increases of between 0.5 per cent and 0.7 per cent for the rest of the year.
Mr Alex Bannister, Nationwide's group economist, said: "We remain confident in our forecast for house price growth of 10 per cent during 2003.
"The trend in house price growth is gradually declining and the economic outlook appears consistent with a steady slowdown rather than a crash".
But he added that London was set to see much slower growth of between just 2 per cent and 5 per cent, while the North was likely have above average increases.
The building society said so far during 2003 sales were 7 per cent lower than for the same period the previous year, with total transactions during April falling to 114,000 - their lowest level since January 2001.
PA