House prices still falling

House prices have fallen for the fourth time in five months, says the Nationwide building society.

The fall of 0.7% in July means prices are now 2.6% lower than they were a year ago, at an average of £164,389.

On Monday, figures indicated that the property market is heading for a new downturn, with new mortgage approvals at their lowest since 2010.

The Nationwide said the decline in house prices was due to the current recession.

Earlier this year the market experienced a brief flurry of sales as some homeowners brought forward their purchases to take advantage of the stamp duty holiday for first-time buyers, before it expired on 24 March.

Boosted by cash sales, where no mortgage is needed, overall house sales across the UK were 11% higher in the first six months of the year than in the same period last year.

But the number of new mortgages approved, but not yet lent - a key indicator of forthcoming trends - fell sharply in June.

At 44,192 they were down 10% on June last year and were also at their lowest level since December 2010.

This suggests that the already low levels of sales may tail off in the coming months.