Annual house price growth fell for the seventh month in a row in May to a 26-month low, Government figures have shown.
The average cost of a UK home dropped 0.3 per cent during the month to £218,151, according to Communities and Local Government.
The fall, driven by a 2.1 per cent slide in detached houses and one per cent drop in bungalows, reduced annual growth to 3.7 per cent.
The figures add to the gloomy news on the property market, with Nationwide Building Society last week saying house prices fell for the eighth month in a row in June.
The group said property values fell 6.3 per cent over the year – the fastest rate of decline since the 1990s crash. Yesterday’s CLG figures were less bleak, with annual price inflation still in positive territory.
However, the data is for May, while Nationwide’s figures are for June, and the CLG figures tend to lag, suggesting it will show a further showdown in months ahead.
Howard Archer, chief UK and European economist at Global Insight, said: “The CLG data do little to dilute the serious concerns over the housing market, even though it shows house prices still rising year-on-year.
“Severe downward pressure on house prices continues to come from very weak housing market activity, elevated affordability pressures on potential house buyers and very tight credit conditions.”
Annual house price growth fell in all regions during May.