According to Nationwide, house prices fell -1.7% in the month of September which is its biggest annual drop since comparable records began in 1991, and this pushes the average price of a property down to £161,767.

Despite the fact that interest rates have just been cut to 4.5%, analysts cautioned that a cut in itself would do little to halt sliding property values. Mortgage approvals are already less than a third what they were a year ago and figures from the Bank of England showed lenders expect to restrict credit even further in the coming months. A survey of construction, meanwhile, showed the sector contracted for a seventh consecutive month in September as commercial activity fell at the fastest pace since the survey began a decade ago.

Nationwide said house prices in September were -12.4% lower than a year earlier. Before 1991, Nationwide conducted quarterly house price surveys. The largest annual fall on that measure was a -10.7% drop recorded in the early 1990s.
Fionnuala Earley, Nationwide’s chief economist, said: “Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets. We would need to see a significant shift in consumers’ sentiment before we begin to see any real recovery in activity and subsequently house prices.”