Nationwide provided further evidence of a housing downturn today.
House prices in the UK fell by 0.9 per cent in June, Nationwide has revealed.
The bank's survey, which showed a smaller drop than the 2.5 per cent it registered for May, showed that the average home now costs just over £172,000. This is also a 6.3 per cent decline over the average for June 2007.
However, the market in Scotland was found by Nationwide to be proving more resilient than elsewhere, with property still registering annual growth of 0.6 per cent.
Mortgage lending has been severely damaged by the credit crunch-induced housing downturn over recent month, due in part to many potential borrowers deciding not to invest in property due to its declining value. The ongoing financial crisis has also caused many firms to tighten their criteria for lending, which has resulted in a further constriction in the sector.
Nationwide's chief economist Fionnuala Earley was downbeat on the chances of a quick recovery for the market in her response to the research.
"It seems unlikely that there will be any rapid turnaround in housing market fortunes in the coming months," she said. "However, as prices continue to fall affordability measures become more favourable for those in a well-financed position to buy."
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