The month-on-month decline across England and Wales has seen the steepest fall since November 2011, taking the average price of a home to £293,599.
Property values however remain 6.8% higher than they were in May 2015.
The latest figures come after The Royal Institution of Chartered Surveyors (RICS) predicted a short-term drop in UK house prices over the next three months for the first time since 2009.
Uncertainty resulting from the upcoming EU referendum, as well as the stamp duty changes in April, were cited as the biggest factors in the price drop.
A survey of 326 surveyors reported that the sharpest decline in house prices would fall across East Anglia, South East England, South West England and Yorkshire and Humber.
The survey also suggested that the number of properties being sold on the market is at a record low.