House price inflation in London is now at its lowest level for five years, according to Hometrack.

The data company reports that London annual price growth has slowed from 14% in May last year to 3.3% in May this year, with the average house price now at £492,200.

Overall, average prices across the 20 UK cities that the firm tracks have risen by an average of  5.1% in the last year to £250,200. Annual house price inflation was running at 8.8% a year ago.

Prices have increased by 3.5% over the past three months, which is the highest quarterly rate for four years, mainly driven by Manchester and Birmingham where growth has been at 3.3% and 3.8% respectively.

On a yearly basis, Birmingham saw prices increase the most by 7.7% in May to £153,500.

Manchester, Leicester and Nottingham have all reported 6.8% annual growth, at £154,800, £165,000 and £146,000 respectively.

The index showed prices across the UK were up 4.7% annually to £210,200, but Richard Donnell, research and insight director at Hometrack, is forecasting growth of just 2-3% for the rest of the year.

He said: “Our latest report identifies two contrasting trends. First there is clear potential for additional house price growth in cities outside south-eastern England.

“House prices in London have grown 90% since 2009 but growth in ten cities has been below 30% over the same period.

“So long as the economy continues to grow, and mortgage rates remain low, we expect house prices to keep rising at a steady rate and close the gap with London.”