Average house prices inched up just 0.2% between April and May, Nationwide has reported.

It meant that annual house price inflation slowed to 4.7%.

According to Nationwide, the average house price in May stood at £204,368, up from April’s £202,436.

Meanwhile, the Bank of England has reported that there were 66,250 mortgage approvals for house purchase in April, down from an average of 71,075 over the previous six months.

Nationwide chief economist Robert Gardner said the housing market has become unpredictable in the near term because of the volatility generated by the Stamp Duty hikes on the purchases of second homes.

He said: “Indeed, the number of residential property transactions surged to an all-time high in March, some 11% higher than the pre-crisis peak, as buyers of second homes sought to avoid the additional tax liabilities.

“While cash purchases accounted for a significant proportion of the increase in activity, it is not possible to determine whether or not these were purchased by landlords.

“Mortgage data suggests that, while buy-to-let purchases were a major driver of the increase, the purchase of second homes also accounted for a substantial proportion.

“The number of home mover mortgages, which is where second home purchases with a mortgage would show up, increased sharply in March.

“House purchase activity is likely to fall in the months ahead, given the number of purchasers that brought forward transactions.

“The recovery thereafter may also be fairly gradual, especially in the buy-to-let sector where other policy changes, such as the reduction in tax relief for landlords from 2017, are likely to exert an ongoing drag.

“Nevertheless, healthy labour market conditions and low borrowing costs are expected to underpin a steady increase in housing market activity once Stamp Duty related volatility has passed, providing the economic recovery remains on track.

“However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead.

“According to the RICS, the number of properties on estate agents’ books was already close to all-time lows on data extending back to the late 1970s.”