There was more bad news for the housing market when new figures from the Land Registry showed the cost of a home in England and Wales dropped by 0.4% in May, to bring average house prices down to £161,823.

This is -2.2% lower than a year ago and is the seventh month out of the previous nine that prices have tumbled, with the average price now down by -3% from its peak in August 2010.

But the gulf between the Capital and the rest of the country widened with London prices rising 0.2% and up 2.9% annually. All other regions saw an annual fall.

The worst areas for house price falls over the past 12 months are the northeast of England (-6.9%), Wales (-5.6%) and the northwest (-4.9%). However, property prices in Wales fell -3.5% last month alone.

With the exception of London, all regions in England and Wales experienced a drop in average house prices during May.

Housing activity also slowed sharply, with the number of transactions dropping by 13% to 44,803 in March, the latest figures available, from 51,399 at the same time last year.