House prices were virtually unchanged in May, the Halifax has reported.

It says they slipped back by just 0.10% compared with April, to stand at £196,067, resulting in annual house price inflation of 8.6%.

Economist Martin Ellis said: “Housing supply remains extremely tight with the stock of properties available for sale currently at its lowest level for many years.

“At the same time, ongoing economic recovery, increasing employment, real earnings growth and very low mortgage rates are all supporting housing demand.

“This combination has kept annual house price inflation well above earnings growth although activity levels are subdued.

“The imbalance between supply and demand is likely to continue to push up house prices over the coming months.

“Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house price growth.”

Halifax’s price is very close to Nationwide’s for May, at £195,166.