Figures also show that the annual rate of house price increases has dropped from 10.5 per cent in April to 9.8 per cent in May.
Since the trough in February last year prices are up 12.2 per cent. Month-on-month, house prices increased by 0.5 per cent in May.
Commenting on the figures, Nationwide chief economist Martin Gahbauer says: “Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months. The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.
Gahbauer also says that the impact of capital gains tax changes depends on the timing of its implementation.
He says: “The coalition agreement between the Conservatives and Liberal Democrats contains plans to increase the rate of capital gains tax charged on the disposal of non-business assets, potentially including second homes and buy-to-let investment properties.
“With regard to what the short-term impact will be on the housing market and house prices, the key question is around the timing and implementation of any CGT increase. If there is a significant time lag between the announcement of the increase and its actual implementation, then some second home owners and buy-to-let landlords may decide to sell in advance of the higher rate being introduced.
“Such a development could lead the supply-demand balance to shift more in favour of buyers and relieve the current upward pressure on house prices. However, it is difficult to know with any precision how many people would bring forward a decision to sell.”