House prices fell by 1.4% in October, according to the latest Nationwide house price index – the 12th consecutive monthly decline – wiping out average gains in housing value since February 2006.

House prices now stand 14.6% below their peak in October 2007.

Economists said the speed of the decline was startling, even when measures other than Nationwide’s were used. According to the Land Registry index, house prices in England and Wales fell by more than 2% in both July and August.

In the recession of the early 1990s, Nationwide’s index fell by 18.8% – between 1989 and 1993.

Ed Stansfield, property economist at Capital Economics – which expects a peak-to-trough drop of 35% in the current cycle – said that high inflation in the early 1990s cushioned the nominal fall in prices. In real terms, adjusted for inflation, housing fell in the past decade at a rate broadly similar to Capital’s forecast for the next few years. Adjusted for inflation, house prices have actually fallen by about 18 per cent over the past year, he said.

Financial Times, The Times, Daily Telegraph