House prices fell by 0.6% in May, resulting in very little overall price change since January according to the latest data from the Halifax.

It says the annual rate of inflation fell to 5.7% last month, continuing the downward trend from the peak of 22.1% in July 2004, leaving the market with a current growth rate slower than it has been for four years.

Estate agents reported broad stability, although sales do remain significantly lower, at 30% less than last year. The sector, however, is underpinned by continuing solid economic performance they said.

As the economy grows and interest rates remain low, Halifax says its outlook for the housing market remains unchanged, and they are continuing to forecast a model of modest decline of 2% this year.

Tim Crawford, Group Economist with the Halifax said: ?The annual rate of house price inflation is low now, and is likely to fall further over the coming months given the large monthly increases in the middle of 2004.

On a brighter note, he added: ?The market is underpinned by sounds fundamentals including record employment levels, good affordability and rising real earnings.?