Average house prices in the UK rose 0.6% in May from the previous month and 9.2% from the same period a year ago.

Halifax housing economist, Marin Ellis pointed towards loose monetary policy and rising wages as the main factors for the increase in house prices.

“Low interest rates, increasing employment and rising real earnings, continue to support housing demand. The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms,” said Ellis.

Although the average price of home sales rose, Halifax noted activity in the sector fell significantly in April compared to March. Halifax, citing data from HMRC, said UK sales fell by 45% from March to April, the biggest drop since 2005.

The upcoming Brexit vote can be attributed to the slowdown in housing activity as investors, particularly from overseas, hold off until the uncertainty diminishes.

The nervousness is evident not only in housing sales activity but also in the share prices of home building stocks. Share in Bovis Homes (-3.15%), Berkeley Group (12.65%), Taylor Wimpey (7.19%) and Barratt Developments are all negative year-to-date.