Prices fell 2.5% last month says the latest survey from Nationwide, bringing prices to 4.4% lower than they were a year ago. The average price of a house now stands at £173,583.

This is the seventh month in a row prices have now fallen according to the lender, the longest consecutive period of monthly falls since 1992.

But the accelerating pace of the price falls was illustrated by the fact that they are now 2.9% lower than they were in the previous three months.

The Nationwide pointed out that its survey chimed closely with much of the other recent evidence about the state of the UK housing market.

Despite this, Nationwide Chief Economist Fionnuala Earley argued that the market was not heading for the same sort of crash as that seen in the early 1990s. ‘First, fewer homeowners bought at the top of the market in this cycle which means a much smaller proportion of borrowers face the full effect of falls in prices than was the case in the 1990s. Secondly, today’s borrowers have typically put down a larger deposit than their 1980s counterparts,’ she said.

Ms Earley said that Nationwide was continuing to forecast single-digit house price falls during 2008.

However not everyone is forecasting doom and gloom. Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA), said: ‘The national sales figures do not tell the whole story.  We know from our members that the picture is still very regional with some areas continuing to do better than others.  Indeed, our recent survey of agents records some stability returning to the market in the number of sales agreed, the number of viewings before a sale is secured and the average difference between asking and sales price.

‘The issue here is consumer confidence. It is apparent from our own survey results that some people are adopting a ‘wait and see attitude’, watching the market, before making any decisions, which is affecting prices.  There is no denying that the credit crunch and tighter economic factors have affected confidence in the market but it is still important to remember that the underlying factors that support the property market remain: low unemployment, historically low interest rates and a latent demand for houses.’