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Property prices 'continue to fall'
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Economists are divided over the future direction of the housing market as Nationwide said prices fell for the second consecutive month during August.
The group reported a 0.9% slide during the month, leaving the average home costing £169,347.
The latest drop follows a fall of 0.5% in July, and is the first time that house prices have dropped for two months in a row since February 2009, according to the Nationwide index.
The annual rate of change also weakened for the fourth consecutive month to stand at 3.9%, the lowest year-on-year rise since November last year.
The gloomy figures come just days after economists warned the housing market could be heading for a double dip.
Figures from the Bank of England released earlier this week showed only 48,722 mortgages were approved for house purchase during July, a level that economists consider to be consistent with house price falls.
The data prompted predictions that property prices could end the year around 5% lower than they started it, with some economists saying they expected prices to have lost 25% of their value by the end of 2012.
But Martin Gahbauer, Nationwide's chief economist, said the recent declines in prices were "not an unhealthy development", as the recovery in the housing market had got ahead of improvements in the wider economy.
He added that with little sign of distressed selling, the current period of price declines was likely to remain "relatively modest".
Richard Hatch, head of residential at property consultancy Carter Jonas, agreed.
