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 now puts the average price of a house at £164,000, 1.4 per cent higher than last October.
Nationwide chief economist Martin Gahbauer says: “October shows a continuation of the modest downward trend in house prices that began at the start of the summer.”
He adds: “If the recent trend in house prices were to continue through November and December, annual rate of house prices inflation would drop to between 0 per cent and -1 per cent by the end of 2010, compared to 5.9 per cent at the end of 2009.”
Nationwide says that further quantitative easing could be a positively influence on the housing market.
Gahbaur says it is impossible to say whether QE2 would fully offset the various headwinds currently facing the housing market, including the results of the spending review.
But, he adds: “On balance, it is reasonable to expect that a resumption of quantitative easing would provide some offsetting support to the housing market.”
The latest Land Registry house price statistics published today show house prices fell 0.2 per cent between August and September, taking the average house price in England and Wales to £166,769. On an annual basis, the data shows house prices are up 5.2 per cent on September last year.