House prices fell at their fastest annual rate for 19 months during May as buyers continued to stay away from the market, figures show.

Homes lost 4.2% of their value during the past year, based on average prices during the three months to the end of May, compared with the same three-month period of the previous year, according to Halifax.

It was the biggest annual drop recorded since October 2009 and left the average home costing £160,519.

Prices also continued to drift lower on a quarter-on-quarter basis, which is generally seen as a smoother indicator of market trends, with homes losing 1.2% of their value on this measure, unchanged from the drop recorded for the three months to the end of April.

The typical home now costs 1.4% less than it did at the start of the year, although prices edged ahead by 0.1% during May itself, following a steep 1.4% drop in April.

Halifax housing economist Martin Ellis said: "Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances. Confidence is also weak as a result of uncertainty about the economic and employment outlook.

"These factors are probably constraining housing demand and applying some downward pressure on prices."

The monthly change was broadly in line with the figure reported by Nationwide for the same period, with the building society saying house prices edged ahead by 0.3% during May, but it recorded a more modest annual decline of 1.2%.

April was a difficult month for the housing market, as the long bank holiday weekends caused people to put their moving plans on hold.

The Bank of England reported a 4% drop in the number of mortgages approved for house purchase during the month, and this fall in activity will have had a knock-on effect on completed sales during May.