Annual price fall reached 10.5% in August, announces Nationwide

UK house prices have seen a double-digit annual fall for the first time since 1990, according to a report by the Nationwide.

The price of a typical house fell by 1.9% in August, bringing the total fall in price over the past year to 10.5%.

According to the building society, a typical home now costs £164,654 - more than £19,000 cheaper than in August last year, and over £4,000 cheaper than the average home cost just last month.

Fionnuala Earley, Nationwide's chief economist, described activity levels on the housing market as “very subdued”.

“Housebuilders in particular have been reporting significant reductions in site visits and report that a lack of confidence in the market is the biggest reason behind the drop-off in demand,” she said, “although changes in lending criteria are also reported as an issue.

“There is clearly less mortgage borrowing taking place in the current market,” said Earley, “but those borrowers choosing a new loan are tending to opt for fixed-rate loans, even though they have been more expensive than trackers.”

Data from estate agents offered “glimmers of interest returning to the market”, she said, but admitted that the reported number of sales had “not been encouraging”.