The price of a typical house fell by 1.9% in August according to the Nationwide.
This means that house prices are 10.5% down year on year, the building society said. The average home now costs £164,654 which is more than £19,000 cheaper than in the same month last year.
Commenting on the figures Fionnuala Earley, Nationwide’s chief economist, said: “The price of a typical house fell by 1.9% in August, bringing the annual fall into double digits for the first time since the fourth quarter of 1990. The price of a typical house fell by 10.5% over the last twelve months to £164,654. While the pace of monthly falls picked up during the month, the less volatile three month on three month measure, eased very slightly in August to 4.5% from 4.6% in July.
“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. However, the reported numbers of sales have not been encouraging.
“There is clearly less mortgage borrowing taking place in the current market, but those borrowers choosing a new loan are tending to opt for fixed rate loans, even though they have been more expensive than trackers.
“The August Inflation Report struck a markedly more dovish tone than in May, even though inflation is at its highest level since 1992 and at more than twice its official target. There is still a great deal of uncertainty, but the Bank of England’s forecasts of growth and inflation have been widely interpreted as opening the door to rate cuts.
“Market rates have reacted to this and as a consequence mortgage rates, particularly fixed rates, have continued to come down. We expect the next move in the Bank Rate to be down, but the extent to which this will revive the mortgage and housing market is likely to be limited while overall confidence in economic and housing market conditions is low.”