House prices fell by 0.7 per cent in October and the quarterly rate of decline has accelerated to 1.5 per cent, according to Nationwide.
The building society’s monthly price index puts the average price of a house at £164,000, which is still 1.4 per cent higher than last October’s figure.
Nationwide chief economist Martin Gahbaur says: “October saw a continuation of the modest downward trend in house prices that began at the start of the summer.”
“Annual house price inflation peaked in April this year at 10.5 per cent, since then it has gradually fallen.”
“If this trend continues through November and December, the annual rate of house price inflation would fall to between 0 per cent and -1 per cent by year-end, compared with 5.9 per cent at the end of 2009.”
Nationwide says that further quantitative easing could be a positive influence on the housing market.
Gahbaur believes it is impossible to say whether QE2 would fully offset “the various headwinds” currently facing the housing market, including the outcome of the spending cuts.
But he says: “It is reasonable to expect that a resumption of quantitative easing would provide some offsetting support to the housing market.”