House prices drop for second month

House prices fell for the second month in a row in August, according to the Nationwide building society.

Prices dropped 0.9 per cent last month, following a 0.5 per cent fall decline in July.

It is the first time that prices have fallen for two consecutive months since February 2009.

The average UK house price is now just over £166,500.

Nationwide said house prices had "essentially stagnated over the summer".

Martin Gahbauer, Nationwide's chief economist Martin Gahbauer 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."

But he added: "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."