moneysupermarket.com: Nationwide May house price survey

Commenting on Nationwide's monthly house price survey, Louise Cuming, head of mortgages at moneysupermarket.com, said: "This is further gloomy evidence that house prices are slipping and will undoubtedly not do anything to help the already low levels of confidence in the market. The figures will also fuel the 'wait and see' approach among the millions of homeowners too afraid to make a move in the current environment, which will add to further stagnation.

"The softening of house values will continue to hit the most vulnerable borrowers, those with little or no equity in their homes. As equity is eroded with falling values, these borrowers will find themselves paying more for their mortgages or, in the worst case scenario, find themselves with no borrowing solutions at all.

"But with every cloud comes a silver lining for some and in this case, it is the first-time buyer who stands to gain. Our recent research found 11 per cent of people who were planning to buy this year had subsequently decided against it due to affordability issues, so today's news may encourage some to re-enter the market. However, as there is an expectation of prices falling further, they may well play a longer waiting game to try and pounce at the bottom of the market - the longer they wait, the more stagnant the mortgage market becomes."