The cost of property has fallen further, according to the UK's biggest mortgage lender.
House prices fell by a further 2.4 per cent last month, putting the UK property market under further pressure.
A new study from Halifax, the UK's largest mortgage lender, shows that an average £5,000 was knocked off the value of a property across May, following 1.3 per cent and 2.5 per cent drops in April and March respectively. The downwards trend, with prices having fallen by around £15,000 since last August, provides further evidence to suggest that homebuyers are becoming increasingly unwilling to buy property in the current financial climate.
Since the beginning of the credit crunch, rises in utilities and food prices - which have put the squeeze on many household budgets - have been matched by mortgage and other loans lenders becoming increasingly unwilling to extend credit to consumers. Both of these factors are thought to have had an impact on house prices, weakening demand for property.
Martin Ellis, chief economist at Halifax, commented: "The decline in prices is caused by the difficulties created for potential house purchasers by the rapid rise in house prices in the last few years, a squeeze on spending power and the reduction in credit availability."
He added: "These factors have curbed housing demand."
