The latest Nationwide House Price Index for February shows that the average property has fallen in value to £147,746 compared to £179,358 this time last year, a difference of £31,612.
During February house prices fell by 1.8%.
Fionnuala Earley, chief economist at Nationwide, says that new buyer enquiries are yet to translate into sales, but falling prices and interest rates are stirring up buyer interest.
She adds: “While lower interest rates alone will not lead the housing market to suddenly pick up, more affordable loans will provide support for both new and existing borrowers in the weak economic environment.
“It is too early to say that the market has reached its trough, given the economic recession, but falling house prices and interest rates have made the situation for borrowers today much easier than it might have been.”