According to Hometrack’s Monthly National Housing Survey, house prices fell 0.1% from April, while they were 3.7% lower in May than last year.
It said that demand is set to fall modestly in the coming months over people’s concerns about household finances and the wider economic outlook.
Furthermore, the ongoing mortgage rationing by lenders means first-time buyers, in particular, are struggling to get a foot on the property ladder.
Richard Donnell, director of research at Hometrack, said: “The late Easter break and May bank holidays reduced the volume of traffic through agents’ offices, but of greater significance is the growing evidence of weakening consumer confidence.”
Hometrack reported that the number of new buyers registering with estate agents during the month dropped by 0.5% – the first fall since January.
However, the number of agreed sales grew by 1.6% last month, although this was lower than April’s 8% rise.
