The average house price in the UK plunged by close to 2.5 per cent over the course of May, according to the latest figures compiled by Nationwide.

Millions of homeowners are experiencing serious debt management and money problems and the average property price has fallen by 4.4 per cent in the past 12 months.

First-time buyers and people looking to remortgage are finding it increasingly difficult to secure a good deal and the reduction of house prices has begun to accelerate, Nationwide reports.

Average house prices fell by £5,000 over the course of May, which represents the sharpest one month decline since the building society started recording relevant data 17 years ago.

"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," said Nationwide’s chief economist Fionnula Earley.

Meanwhile, the Axa insurance firm warned that the money problems facing British homeowners could soon be worse than those experienced during the last property crisis in the early 1990s.