The average house price has tumbled over the past year to £164,389, a fall of 2.6%.
This is the fourth decline in prices in five months, reflecting a fall of 0.7% during July. House prices are currently 13% below their 2007 peak, prior to impact of the economic crisis.
As well as the continuingly tough economic climate, the dip in house prices is believed to be due to a fall in economic output, a lack of building activity and bad weather over the past few months.
Robert Gardner, chief economist for Nationwide Building Society, which compiled the figures, said: "The weaker price trend observed in recent quarters is unsurprising, given the disappointing performance of the wider economy."
"Data released last week revealed that the UK recession intensified in the three months to July, with the economy contracting by 0.7% quarter on quarter."
Find the best mortgage rate - Compare best selling mortgages
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.