The price of an average house fell by 1.9% in August, bringing the annual fall into double digits for the first time since 1990, says Nationwide’s latest report. The fall now stands at 10.5% bringing the average UK house price to £164,654, although three-month on three-month prices eased the falls from 4.6% to 4.5% in July.

‘Recent activity levels in the housing market have been very subdued,’ said Fionnuala Earley Nationwide’s chief economist. ‘House builders in particular have been reporting significant reductions in site visits and reservations of new properties since this time last year, in spite of a big increase in the use of sales incentives.

However all is not doom and gloom, Ms Earley said. ‘Estate agents’ data across all property types is a little more optimistic and suggests that there may be some glimmers of interest returning to the market. Agents report an improvement in new buyer enquiries, perhaps stimulated by the recent falls in prices and the opportunity to negotiate a good deal.

‘Current movements suggest that the increased supply of properties on agents’ books will continue to act as a dampener to house price growth in the short term.’

Given the persistent run of bad news on the housing market in recent months, this
latest set of negative numbers should not come as a surprise,’ said Seema Shah from Capital Economics.

‘And the slump in mortgage approvals to just a third of their level a year ago is consistent with further sharp falls in house prices in the months ahead. What’s more, measures such as mortgage affordability and the ratio of house price to earnings suggest that this housing market correction will run much further than just a few more months, or quarters.’