House prices crept ahead by just 0.1 per cent during May as the mini-revival in the property market showed further signs of running out of steam.
Britain's biggest mortgage lender Halifax said the rise was the smallest increase in the cost of property since prices fell by 0.2 per cent in January this year.
It said there were signs that activity in the sector was beginning to level out, and the market looked set to continue slowing over the remainder of the year.
The figures were in line with ones recently reported by Nationwide Building Society, which showed house prices edging ahead by just 0.2 per cent during May, following a 0.1 per cent rise in April, while annual house price growth eased to 4.7 per cent.
But it contrasted with claims from the Council of Mortgage Lenders which said this week prices could rise seven per cent during 2006.
Martin Ellis, Halifax chief economist, said: "There are signs that housing market activity may be beginning to level out.
"The pressures on the household sector resulting from higher unemployment and significantly higher household bills, together with the current high level of house prices in relation to earnings, are likely to constrain housing demand and curb house price growth and activity over the remainder of 2006."
May's slowdown in price growth comes after a strong jump of two per cent during April, with the average cost of a home rising by 4.6 per cent during the three months to the end of April.
But despite the easing in growth this month, annual house price inflation for the year to the end of May rose to 9.1 per cent, the highest figure for 14 months and up from eight per cent in April, leaving the average property in the UK costing £178,997.
Halifax said this was mainly due to the fact that comparative figures during the previous year had been weak, while the recent momentum in the housing market had caused the annual growth rate to pick up.
But it added that the stronger picture of house price growth during the second half of 2005 compared with the first six months of that year should mean that annual house price inflation moderated during the rest of 2006.
Howard Archer, chief UK and European economist at economics group Global Insight, said: "The marginal 0.1 per cent rise in house prices in May reported by the Halifax adds to the recent mounting evidence that house prices may be starting to lose momentum.
"While it is premature to draw any firm conclusions, there are growing signs that the recent mini-boom in the housing market is faltering."
This easing of growth was reflected in UK construction orders, which slumped in the three months to April.
Orders were down 14 per cent from the previous quarter and by four per cent compared with the same period a year ago, the Department of Trade and Industry said.
Falls were widespread within the sector. Private housing orders declined one per cent from the previous quarter, and by 14 per cent year-on-year.
Public housing and housing association orders fell 12 per cent from the previous three months, but rose 18 per cent from the same period a year earlier. Infrastructure orders slumped 34 per cent compared with the previous three months, and by 22 per cent year-on-year.