In August UK house prices suffered their greatest month-on-month fall since July 2012, according to new data released today.
Building society Nationwide's house price index showed prices fell by half a per cent in August, as annual house price growth slowed to two per cent.
The average price of a house slipped to £214,745 in August, from £217,010 in July.
Nationwide's chief economist, Robert Gardner, said: “August saw a slight softening in annual house price growth to two per cent, from 2.5 per cent in July. Nonetheless, annual house price growth remains within the fairly narrow range of two to three per cent which has prevailed over the past 12 months, suggesting little change in the balance between demand and supply in the market.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on house price growth and market activity this year, though borrowing costs are likely to remain low.
“Overall, we continue to expect house prices to rise by around one per cent over the course of 2018.”
Howard Archer of EY Item Club said: "August’s marked relapse suggests that the clear monthly increases seen in July (0.7 per cent) and June (0.5 per cent) were a false dawn for house prices.
“We suspect that any meaningful housing market upturn will remain elusive over the coming months.”