House prices in the UK fell 0.9 per cent in August, the second consecutive fall after a 0.5 per cent dip in July, the country's largest building society Nationwide has reported.
The average price of a home in the UK is now £166,507, after the first consecutive monthly fall in 18 months.
Martin Gahbauer, Nationwide's chief economist, said, "Unless house prices bounce back strongly in September, the three month rate of change will turn negative next month."
The three-month rate of change fell from 1.2 per cent in July to nil in August. This suggests that "house prices have essentially stagnated over the summer," he added.
Gahbauer also noted that there was little evidence of distressed selling, with the Council of Mortgage Lenders' second-quarter figures showing another drop in mortgage arrears and possessions.
The annual rate of inflation remains positive at 3.9 per cent. But this is a sharp fall from 6.6 per cent in July and 8.7 per cent in June, and is the lowest year-on-year increase since November.
