The house price index has fallen for two consecutive months for the first time since February 2009

New figures released by the Nationwide building society today show that prices fell 0.9% in August, following a 0.5% drop in July. It was the first time that prices fell on the Nationwide house price index in two consecutive months since February 2009. Nationwide said house prices had “essentially stagnated over the summer”.

Martin Gahbauer, Nationwide’s chief economist, said: “As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices.”

“Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development.”

The annual rate of house price inflation adjusted sharply from 6.6% in July to 3.9% in August.