House prices in May were 3.3 percent higher than a year ago, the weakest increase since May 2013 and compared with a 3.8 percent rise in April. Economists in a Reuters poll had expected to see an annual increase of 3.0 percent.

In May alone, house prices were 0.4 percent higher than in April, confounding forecasts for 0.1 percent drop.

Halifax said a weak supply of new homes and existing properties for sale, combined with low interest rates and high unemployment, should support house prices over the coming months.