The mutual’s house price index showed that house prices fell by 0.2% this month, repeating falls of 0.4% and 0.2% in February and March respectively.
April bucked the trend, but by the slimmest margin as prices rose just 0.1% last month.
Nationwide expects house price growth to remain sluggish over the coming year with subdued activity at present and a generally lethargic economy.
Prices also fell by 0.2% over the three months of March, April and May compared to the preceding period.
This slowed the annual rate of property growth to 2.4%, with the average UK house price valued at £213,618, compared to £208,711 in May 2017.
Nationwide chief economist Robert Gardner (pictured) noted annual house price growth had been confined to a narrow range of around 2% – 3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period.
“There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent,” he said.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. Overall, we continue to expect house prices to rise by around one per cent over the course of 2018,” he added.
Mortgage Advice Bureau head of lending Brian Murphy noted that in some respects, the market was continuing to perform within expectations, but that conditions were becoming increasingly fragmented.
He highlighted data from other sources pointing to some areas seeing significant price increases as a result of lack of stock and strong buyer demand while other conurbations were witnessing a similar lack of properties coupled with fewer levels of buyers, meaning values were stagnating or, in some cases falling.
“The lacklustre spring market in some towns and cities has highlighted that discretionary movers are few and far between in the current climate, with recent figures from UK Finance also suggesting that buy to let purchase borrowing has also seen a significant reduction in recent months,” he said.
“However, the fact that we’re still seeing an increase in annual growth – albeit modest – and that transaction levels are ticking over at a reasonably consistent level do suggest that, while the fizz may have gone out of the market in some parts of the UK, realistically priced homes are still very much in demand.”
Greyer by the day
Octane Capital CEO Jonathan Samuels added that tight supply and subdued demand were the key contributors to the ongoing limbo gripping the UK property market.
“A lethargic economy populated by cautious and squeezed consumers has created a property market lacking both momentum and direction,” he said.
“The property market is fuelled by confidence but many consumers are running on fumes. Low stock levels and continued cheap borrowing rates will prevent a material decline in prices but equally a rise greater than very low single digits is highly unlikely.
“From a house price growth perspective, 2018 is looking greyer by the day,” he added.