House prices fell by 0.6% in August compared to the previous month, according to the latest Nationwide house price index.
The average house was worth £165,914 in August, down from £168,731 in July and 0.4% lower than in August 2010.
Robert Gardner, chief economist at Nationwide, says although house prices fell by 0.6% in August, this does not change the picture of relative stability that has characterised the market over the past year.
He says: “Sluggish demand for homes, combined with only a gradual rise in the supply of available properties, has helped to keep property prices stable since last summer.
“We expect this trend to be maintained over the remainder of 2011, although downside risks have increased as UK and global growth prospects have weakened.”