House prices have recorded their sharpest one-year drop since 1991, according to the latest data from the Nationwide house price index, with a further 1.7% decline in September.

For the quarter ending in September, house prices were 4.6% lower than at the end of the previous quarter.

The latest drop marks the 11th consecutive monthly fall in house prices, but economists at Nationwide took comfort from the fact that the rate at which prices are falling appears no greater than that in recent months.

'The monthly rate of fall has barely changed for the last three months after accelerating in the first half of the year,' said Fionnuala Earley, chief economist at Nationwide.

Earley also noted that the less volatile three-month on three-month series had also barely changed after accelerating in the first half of 2008. 'This may suggest the beginning of some stabilisation in the pace of house price falls,' she said.

Financial Times, The Times