House prices fell for the second month in a row during August, as the supply demand imbalance appears to be unwinding.
The average property in the UK saw almost £3,000 shaved off its value last month.
The fall from £169,507 to £166,507 from July to August represents a 0.9% month-on-month decline in prices, and follows the previous 0.5% month-on-month drop.
It is the first occasion since February 2009 that prices have fallen for two months in succession, according to Nationwide.
The three month on three month rate of change – considered a smoother indicator of the recent price trend – fell from 1.2% in July to 0.0% in August, suggesting that house prices stagnated over the summer months.
Should the housing market fail to bounce back strongly in September, the three month rate of change will soon turn negative.
"Recent market trends remain consistent with an unwinding of the supply-demand imbalance that drove up prices for much of last year," commented Martin Gahbauer, Nationwide's chief economist.
"As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices."
On an annual basis, prices are still higher than they were 12 months ago, with the annual rate of inflation measuring 3.9%.
However, it is down quite sharply from rates of 8.7% and 6.6% in June and July respectively.
Separate figures have also revealed a swing from buyers towards variable rates over the last few years.
Between the final three months of 2008 and the first quarter of this year, the proportion of mortgage balances on fixed rates fell from 48% to 36%, a fall driven by the attractive standard variable rates that borrowers were put on once their original term came to an end.
"Borrowers on variable rates have experienced a very large cash flow benefit from the reduction in the Bank of England base rate in last 2008 and early 2009," added Mr Gahbauer.
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