Figures for the Nationwide have shown house prices slid 2.5% in May – the biggest monthly fall recorded by the building society.

The average house lost almost £5,000 in value, to £173,583, over the month, leaving average prices 4.4% lower than a year ago.

May’s drop represents a seventh successive month of falls – the longest consecutive period of decline since 1992 – as fears over the economy grow, Nationwide added.

The figures were much worse than the 0.5% monthly fall expected by leading economists.

The annual decline is also the biggest since December 1992 when house prices were falling at an annual rate of 6.3%.

Fionnuala Earley, Nationwide’s chief economist, said: “The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market.”